The Right to Buy cost floor rule is one reason your Right to Buy discount could be lower than expected. It can apply where your landlord has spent money buying, building, repairing, maintaining or improving your home.
A lower discount means a higher purchase price. That can increase the amount you need to borrow through a Right-to-Buy mortgage and affect whether the discount can help as your deposit.
The cost floor is one of several rules that can affect how Right to Buy works and the final price you are offered for your council home.
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What is the Right to Buy cost floor rule?
The cost floor limits how far your discount can reduce the price of your home.
It looks at certain costs your landlord has incurred on the property over a set period. If those costs mean the home cannot be sold as cheaply as your normal discount would suggest, your discount can be reduced.
It does not affect every purchase, and it does not always remove the discount. Your landlord confirms whether it applies and how it affects your offer.
For applications successfully lodged before 21 November 2024, it is generally 10 years, or 15 years where the home was built or acquired by the landlord on or after 2 April 2012.
A 15-year period also applies to Preserved Right to Buy, so the rules affecting your purchase can depend on which scheme and application date apply to you.
Example of how the cost floor could affect your price
Suppose your home is valued at £160,000:
Expected discount: £26,000
Expected purchase price: £134,000
Cost-floor minimum sale price: £148,000
Revised discount: £12,000
Revised purchase price: £148,000
Here, the discount falls by £14,000, so the buyer would need to cover an extra £14,000 through their mortgage, cash or both.
This is only an example. Your landlord calculates the actual figures.
Where will you see the cost floor adjustment?
If your landlord agrees that you have the Right to Buy, they will send you a Section 125 Notice setting out the proposed price, discount and terms of sale.
The notice should state if your discount has been reduced because of the cost floor. If the figure is unclear, ask your landlord to explain it. You should also make sure you have told them about improvements you paid for yourself.
How could the cost floor rule affect your mortgage?
A smaller discount usually means a higher Right-to-Buy purchase price. That may mean:
You need to borrow more.
Your estimated monthly repayments rise.
The higher mortgage amount affects affordability.
The remaining discount is less useful as a deposit.
You decide the purchase no longer works for your budget.
This can be particularly important if you were planning on using your Right to Buy discount as a deposit. Some lenders may accept the discount instead of a separate cash deposit, but a smaller discount can change those figures.
You can adjust the property value and discount in our Right-to-Buy mortgage calculator to estimate how the revised purchase price could affect your mortgage amount and monthly repayments.
What should you do if your discount is lower than expected?
If the figures in your offer are different from what you expected:
Check the Section 125 Notice.
Ask your landlord to explain the cost-floor adjustment.
Check that improvements you paid for yourself have been recorded.
Consider independent legal advice if you disagree with or do not understand the figure.
Recheck your mortgage numbers before deciding whether to continue.
A mortgage broker cannot decide whether the cost floor has been applied correctly. Their role becomes more relevant once your landlord has confirmed the revised price and discount.
When to speak to a mortgage broker
Once those figures are known, a broker can check whether the higher borrowing amount looks affordable, whether the remaining discount may still work as a deposit and which lenders may consider the case.
If the cost floor has changed the amount you need to borrow, getting help with a Right-to-Buy mortgage can help you understand whether the revised purchase price still works with your income, deposit position and lender options.
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FAQs
Why has my Right-to-Buy discount been reduced?
The cost floor is one possible reason. It can limit the discount where your landlord has incurred certain costs on the property.
Does the cost floor mean I cannot buy my council house?
No. It may increase the purchase price, but it does not automatically stop you buying.
Can I challenge the cost floor figure?
If you do not understand or agree with the adjustment, ask your landlord for clarification and consider independent legal advice.
Does the cost floor affect my mortgage?
It can. A reduced discount increases the purchase price, which may mean you need a larger mortgage and could change your affordability.
Can the discount still be used as a deposit?
Potentially. Some lenders may accept the remaining discount as a deposit, but this depends on the lender and your wider application.
Right to Buy and Right to Acquire can both help some social housing tenants buy their rented home at a discount, but they are different schemes. Right to Buy is mainly for eligible council tenants. Right to Acquire may apply to some housing association tenants, while others may have Preserved Right to Buy because their home transferred from a council.
Your landlord must confirm which scheme, if any, applies.
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Right to Buy vs Right to Acquire: the simple difference
Scheme
Usually applies to
Discount
Eligibility confirmed by
Right to Buy
Eligible council tenants
Regional cash limits apply
Council or landlord
Preserved Right to Buy
Some tenants whose home transferred from a council
Similar to Right to Buy
Housing association or landlord
Right to Acquire
Some housing association tenants
Usually a smaller fixed discount
Housing association or landlord
Your landlord, tenancy history and property all matter. Eligibility is not automatic.
The property normally needs to be your main or only home, be self-contained and be held under a secure tenancy. You will also usually need at least three years as a public-sector tenant. Your council must assess the application.
What is Preserved Right to Buy?
Most housing association tenants do not have standard Right to Buy. You may have Preserved Right to Buy if you were a secure council tenant and lived in the property when it transferred to a housing association.
For example, if your council transferred your home but you remained there, your right may have been preserved. Your landlord can confirm whether this applies.
What is Right to Acquire?
Right to Acquire may allow an eligible housing association tenant in England to purchase their rented home at a discount.
Both the tenant and property must qualify. The property generally needs to have been built, bought or transferred under the scheme’s rules, and the landlord must be registered with the Regulator of Social Housing.
The April 2026 GOV.UK guide says discounts are between £9,000 and £16,000, depending on location.
Which scheme might apply to you?
As a broad guide:
Council tenant: Right to Buy may apply.
Housing association tenant who lived in the home when it transferred from a council: Preserved Right to Buy may apply.
Other housing association tenant: Right to Acquire may be worth checking.
Your landlord must check the full circumstances, including the property and tenancy history.
How do the discounts compare?
Right to Buy discounts can depend on the property type and how long you have been a public-sector tenant, but a regional maximum cash limit also applies.
For eligible applications received from 21 November 2024 onwards, current maximum Right to Buy cash discounts range from £16,000 to £38,000, depending on the region. Earlier applications may have been assessed under the previous, higher limits.
Right to Acquire offers a fixed cash discount of £9,000 to £16,000, based on location.
Discount rules can change, so check current official guidance and ask your landlord to confirm the amount.
Can you get a mortgage with either scheme?
Qualifying for a scheme does not guarantee mortgage approval. A lender will still assess whether the loan is affordable and whether the property is acceptable security.
Some lenders may accept the Right to Buy discount as some or all of the equity normally provided by a cash deposit. Others may require your own money, depending on the mortgage and their limits.
Treatment of a Right-to-Acquire mortgage can also vary. Neither scheme guarantees a no-deposit mortgage, and published lender criteria show that providers approach discounted purchases differently.
If Right to Buy applies, our Right-to-Buy mortgage calculator can give you a rough estimate of how the discount affects the figures. It is mainly designed around Right-to-Buy calculations.
Why property type can matter
Some lenders may be cautious about certain high-rise flats, non-traditional construction, short leases or homes with limited resale demand.
The lender and its valuer must still be satisfied with its construction, condition and marketability.
When should you speak to a mortgage broker?
It may help to speak to a broker after your landlord confirms the scheme, or once you receive a valuation and formal offer.
A broker can assess affordability, credit history, property type and how lenders may treat the discount. If you want to see whether it’s possible to buy your council home, Monday Mortgages can help through its Right-to-Buy mortgage advice service.
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Right to Buy and Right to Acquire FAQs
What is the difference between Right to Buy and Right to Acquire?
Right to Buy is mainly for eligible council tenants. Right to Acquire may apply to some housing association tenants and qualifying homes.
Can housing association tenants use Right to Buy?
Usually not, but some may have Preserved Right to Buy if they lived in the home when it transferred from a council.
What is Preserved Right to Buy?
It is a right that may continue after an occupied council home transfers to a housing association.
Is the Right to Acquire discount lower than Right to Buy?
Right to Acquire currently offers £9,000 to £16,000. Maximum Right to Buy cash discounts currently range from £16,000 to £38,000, although an individual discount may be lower.
Can I get a mortgage with Right to Acquire?
Possibly, but approval depends on affordability, credit history, the property and the lender’s criteria.
If you live in a council property, you might be wondering whether you can buy your council house and become the owner of the home you already live in.
The short answer is: some council tenants may be able to buy their home through Right to Buy, but it depends on your tenancy, your property and your personal circumstances. Your council or landlord must confirm whether you’re eligible.
If you do qualify, the next question is usually whether buying your council house is affordable and whether you can get a mortgage. These are separate checks. Being eligible for Right to Buy doesn’t automatically mean a lender will approve you for a mortgage.
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Can you buy your council house?
You may be able to buy your council house if you meet the Right to Buy rules. These rules look at things like your tenancy type, how long you’ve been a public sector tenant, whether the property is your main home and whether the home itself can be bought under the scheme.
For most people, the first step isn’t the mortgage. It’s checking whether you actually have the right to buy the property.
Your landlord or council is responsible for confirming this. A mortgage broker can help with the mortgage side, but they can’t confirm your legal eligibility for Right to Buy.
What is Right to Buy?
Right to Buy is a scheme that can allow eligible council tenants to buy their council home at a discount.
Instead of paying the full market value, you may be able to buy at a reduced price. The discount depends on factors such as how long you’ve been a public sector tenant, the type of property, where it is and any rules that reduce or cap the discount.
If you’re starting to look at the mortgage side, our Right-to-Buy mortgages page can help explain how lenders may look at the application.
What might affect whether you can buy your council home?
Several things can affect whether you can buy your council home through Right to Buy.
Check
Why it matters
Tenancy type
Right to Buy usually depends on having the right type of tenancy.
Main home
The property usually needs to be your only or main home.
Tenancy history
Your time as a public sector tenant can affect whether you qualify and the discount.
Property type
Some homes may be excluded from Right to Buy.
Legal or tenancy issues
Debt, possession or tenancy issues may affect the application.
Landlord confirmation
Your council or landlord must confirm whether you’re eligible.
Some homes may be excluded because of the property type, the type of tenancy, planned demolition, or because the property is specially suited to elderly or disabled residents.
This is why it’s important to check with your landlord before making firm plans around purchasing your council house.
Why tenancy type matters
Your tenancy type is one of the biggest factors.
Right to Buy is mainly associated with secure council tenants. If you’re not sure whether you’re a secure tenant, your tenancy agreement or landlord should be able to confirm this.
Some tenants may also have Preserved Right to Buy. This can apply where someone was originally a council tenant, but the home was transferred to another landlord, such as a housing association.
The key point is that not every social housing tenant has the same rights. Before thinking too far ahead about buying a council house, make sure you understand what type of tenancy you have.
Can housing association tenants buy their home?
Housing association tenants may not always have the same rights as council tenants.
Some may have Preserved Right to Buy if they were living in the home when it transferred from the council to a housing association. Others may have a different option, such as Right to Acquire, depending on their circumstances.
Our guide to Right to Buy and Right to Acquire explains the main differences between the schemes and which type of tenant each one may apply to.
If you rent from a housing association, check directly with them. They can confirm whether Right to Buy, Preserved Right to Buy, Right to Acquire or another option may apply.
The amount can depend on the type of property, how long you’ve been a qualifying public sector tenant, the value of the property, where it is and whether any rules reduce the discount.
Here’s a simple example of how the discount could affect the purchase price:
Example
Amount
Property value
£180,000
Right to Buy discount
£20,000
Discounted purchase price
£160,000
Mortgage needed before any cash contribution
£160,000
This is only a simple example. Your actual Right to Buy discount and purchase price would need to be confirmed by your landlord.
What happens after you apply to buy your council house?
The process usually starts with checking whether you may be eligible and then submitting the Right to Buy application to your landlord.
At a high level, the process looks like this:
Step
What happens
Check eligibility
You look at whether Right to Buy may apply to your tenancy and property.
Apply
You submit the Right to Buy application to your landlord.
Landlord response
Your landlord confirms whether they accept that you have the right to buy.
Offer notice
If accepted, your landlord provides details of the valuation, discount and purchase price.
Decide whether to continue
You review the numbers and decide whether buying your council home still makes sense.
Arrange the mortgage
If you need a mortgage, this is when the lender side becomes more important.
Complete the purchase
Your solicitor handles the legal process through to completion.
You don’t have to continue just because you’ve applied. If the numbers don’t work, or you decide home ownership isn’t right for you, you can choose not to proceed.
Can you get a mortgage to buy your council house?
Many people need a mortgage unless they can buy the property outright.
A lender will still assess your application in the normal way. They’ll usually look at your income, outgoings, credit history, debts, age, mortgage term and the property itself.
This is an important distinction:
Right to Buy eligibility
Mortgage approval
Confirmed by your council or landlord
Decided by the lender
Looks at your tenancy and property
Looks at income, affordability and credit history
Confirms whether you can apply to buy
Confirms whether you can borrow enough
May include a discount
May depend on whether the lender accepts the discount as deposit
Some properties can also be more difficult to mortgage. For example, certain flats, high-rise blocks or non-standard construction properties may reduce the number of lenders available.
If you want help with a Right-to-Buy mortgage, it can be useful to speak to a broker before making assumptions about what you can borrow.
Could the discount help with the deposit?
In some cases, yes.
Some lenders may allow the Right-to-Buy discount to take the place of some or all of a separate cash deposit.
Halifax, for example, currently allows lending up to 100% of the discounted purchase price, subject to its normal valuation-based lending limits.
However, this isn’t guaranteed. It depends on the lender, the size of the discount, the property and your wider circumstances.
For example, one lender might be comfortable using the discount as the deposit, while another may still want you to contribute some of your own money. This is one reason why Right-to-Buy mortgage options can vary between lenders.
You can use our Right-to-Buy mortgage calculator to get a rough idea of how the discount could affect the purchase price, mortgage amount and possible deposit position.
What might affect your mortgage options?
Your mortgage options may depend on both your finances and the property you’re buying.
Factor
How it may affect your mortgage
Income
Helps lenders decide how much you may be able to borrow.
Employment type
Self-employed applicants may need different income evidence.
Benefits income
Some lenders may accept certain benefits income, but rules vary.
Monthly commitments
Loans, credit cards and other regular payments can reduce affordability.
Credit history
Missed payments, defaults or arrears may reduce lender options.
Age and mortgage term
The mortgage term can affect monthly payments and lender criteria.
Property type
Some properties can be harder to mortgage.
Discount size
A larger discount may improve the numbers, but it doesn’t guarantee approval.
Deposit treatment
Some lenders may use the discount as the deposit, while others may not.
If you’re self-employed, you may need to show your income in a way the lender accepts. Our self-employed mortgage advice can help explain what lenders may ask for.
If you’ve had credit issues, such as missed payments, defaults or arrears, your options may be narrower. In that situation, it may be worth looking at adverse credit mortgage support before applying.
When should you speak to a mortgage broker?
You may want to speak to a mortgage broker once you’ve started checking whether you can buy your council house, especially if you want to understand whether the mortgage side is likely to work.
This can be helpful if you’ve received or estimated the property value, you’re unsure whether the discount can count as your deposit, you’re self-employed, you have credit issues, or the property type may be harder to mortgage.
If you’re thinking about buying your council home and want to understand the mortgage side, Monday Mortgages can help you check your options.
You can also use our Right-to-Buy mortgage calculator to estimate your discounted purchase price, mortgage amount and possible deposit position.
[FAQ]
FAQs
Can you buy your council house?
Some council tenants may be able to buy your council house through Right to Buy, but eligibility depends on your tenancy, property and circumstances. Your landlord or council must confirm whether you qualify.
Can you buy your council house if you’re on benefits?
Possibly. Being on benefits doesn’t automatically mean you can’t buy, but mortgage lenders will look at whether your income is acceptable and whether the mortgage is affordable.
Can you buy your council house if you’re self-employed?
Yes, being self-employed doesn’t automatically stop you from buying your council house. Lenders will usually want to understand your income, trading history and affordability before offering a mortgage.
Can you buy your council house without a deposit?
Some lenders may accept the Right to Buy discount as the deposit, meaning a separate cash deposit may not always be needed. This depends on the lender, your circumstances and the property.
Can you buy your council house with bad credit?
Bad credit doesn’t always make it impossible, but it can limit your options. Lenders will look at what happened, how recent it was, how serious it was and whether your finances are now stable.
Is being eligible for Right to Buy the same as getting a mortgage?
No. Right to Buy eligibility is confirmed by your landlord or council. Mortgage approval is decided by a lender based on income, affordability, credit history and the property.
If you’re a council tenant and have started looking into ways to buy your home, you may have come across Right to Buy. It’s a scheme that can allow eligible tenants to buy their council home at a discount, which may make home ownership feel more achievable.
But it’s important to understand how the scheme works before assuming it’s the right route for you. Right to Buy can reduce the price you pay, but it doesn’t automatically mean you’ll qualify, get the maximum discount or be approved for a mortgage.
This guide focuses on Right to Buy in England. Different rules may apply in Scotland, Wales and Northern Ireland.
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So what is Right to Buy?
The simple answer is that it’s a government scheme that may let eligible council tenants buy the home they already live in for less than its full market value.
The discount is based on your circumstances and the rules that apply when you apply. It isn’t paid to you as cash. Instead, it reduces the purchase price of the property.
For example, if your home is valued at £180,000 and your confirmed discount is £26,000, the price you pay would be £154,000.
That lower price can make buying your council home more realistic, especially if you’ve lived there for a long time and want to stay in the property.
Who is Right to Buy for?
Right to Buy is generally aimed at eligible council tenants.
Some housing association tenants may also have something called Preserved Right to Buy if their home was transferred from the council to another landlord while they were living there.
At a high level, your eligibility can depend on things like:
Whether you’re a secure tenant
Whether the property is your only or main home
Whether the property is self-contained
Whether you’ve had a public sector landlord for at least 3 years in total — the years don’t have to be consecutive
Whether any exclusions apply
This article isn’t a full eligibility guide, and your landlord or council should confirm whether you qualify. If you’re unsure, that’s usually the best first place to check.
The Right-to-Buy discount reduces the price you pay for your home. It can depend on several factors, including the type of property, where it is, how much it’s worth and how long you’ve been a qualifying tenant.
Under the April 2026 government guidelines, maximum cash discounts are currently between £16,000 and £38,000, depending on location.
There are also rules that can reduce the discount. For applications made after 21 November 2024, for example, the discount can be reduced if your landlord has spent money building or maintaining the home during the previous 30 years. This is known as the cost floor rule.
Your landlord will confirm the property valuation, the discount and the price you’d need to pay.
How does buying your council home work?
The exact process is handled through your landlord, but the broad steps usually look like this:
Check whether you may be eligible
Apply through your landlord or council
Wait for the landlord’s response
Receive the offer notice, valuation and confirmed discount
Many people need a mortgage unless they can buy the home outright with cash.
People often use the phrase Right to Buy mortgage, but this usually means a normal mortgage used to buy a property through the Right to Buy scheme. It isn’t a separate government mortgage product.
That means the lender will still assess your application. They’ll usually look at your income, spending, credit history, debts, age, mortgage term and the property itself.
This is where Right to Buy mortgages can be slightly different from a standard home purchase. The property may already have a confirmed discount, and some lenders may treat that discount in a helpful way. But lender criteria can vary, so it’s worth checking your options before assuming every lender will view the application the same way.
Can the Right-to-Buy discount help with the deposit?
In some cases, yes. Some lenders may accept the discount as the deposit, which could mean you don’t need a separate cash deposit.
But this isn’t guaranteed.
It can depend on the lender, your affordability, your credit history, the property type and the size of the discount, as noted in the government guidance for buyers. Some lenders may still want you to contribute cash, or they may have specific rules around how the discount is treated.
This is one reason Right-to-Buy mortgage advice can be useful before you get too far into the process. A broker can help you understand which lenders may be comfortable with your situation and whether the discount could work as the deposit.
Example of how Right to Buy could work
Here’s a simple example:
Estimated property value: £180,000
Example Right-to-Buy discount: £26,000
Discounted purchase price: £154,000
Mortgage needed: £154,000, if no separate cash deposit is used
In this example, the discount reduces the amount the buyer needs to borrow. If a lender accepts the discount as the deposit, the buyer may not need to put in a separate cash deposit.
But this is only an example. Your actual figures will depend on your property value, confirmed discount, lender criteria and personal circumstances.
You can use our Right-to-Buy mortgage calculator to get a rough idea of how the discount could affect your purchase price, mortgage amount and possible deposit position.
What could affect your mortgage options?
Even with a discount, the lender still needs to decide whether the mortgage is affordable and whether the application meets its lending criteria.
They may look at:
Your income
Your employment type
Your regular spending
Loans, credit cards and other commitments
Your credit history
Your age and mortgage term
The property type and condition
Whether the discount can be treated as deposit
FCA affordability rules require regulated mortgage lenders to take account of income, committed expenditure and essential household costs when assessing affordability.
The property itself can also matter. Some lenders may be more cautious with certain flats, high-rise blocks, non-standard construction or properties with major repair concerns.
If you’ve had credit issues such as missed payments or defaults, that doesn’t always mean buying is impossible, but it may affect which lenders are available. In that situation, it may help to look at adverse credit mortgage options before applying.
If you’re self-employed, lenders may also look closely at how your income is evidenced. You may want to understand self-employed mortgage advice before relying on your income figures.
What other costs should you think about?
Right to Buy isn’t only about the purchase price and mortgage payment. Once you own the home, you’ll usually be responsible for more costs than you were as a tenant.
These can include:
Legal fees
Survey costs
Mortgage fees
Buildings insurance
Repairs and maintenance
Service charges if you’re buying a flat or leasehold house
If you’re buying a flat, you’ll usually become a leaseholder. The landlord will normally remain responsible for maintaining the wider building and communal areas, while you’ll pay your share through service charges and may also have to contribute towards major works.
It’s also worth checking the current resale rules if you think you might sell later. If you sell within five years of buying through Right to Buy, you’ll usually have to repay some or all of the discount. If you sell within 10 years, you must first offer the property to your old landlord or another social landlord in the area.
When should you speak to a mortgage broker?
You may want to speak to a mortgage broker once you have an idea of the property value, discount and likely purchase price.
It can also help to speak to someone earlier if you’re unsure whether the numbers are realistic, whether your income is likely to fit, or whether the discount could be accepted as the deposit.
A broker can help explain lender options, affordability and what may be possible based on your situation.
If you’re thinking about buying your council home and want to understand the mortgage side, Monday Mortgages can help you check your options. You can also use our mortgage calculators to estimate your mortgage costs before deciding what to do next.
[FAQ]
FAQs
What is Right to Buy?
Right to Buy is a scheme that may allow eligible council tenants to buy the home they live in at a discount. The discount reduces the purchase price rather than being paid to you as cash.
Who can use Right to Buy?
Right to Buy is generally for eligible council tenants, although some housing association tenants may have Preserved Right to Buy. Your landlord or council should confirm whether you and your property qualify.
How much discount can you get with Right to Buy?
The discount depends on factors such as the property, location, value and your qualifying tenancy history. Under the April 2026 government guide, maximum cash discounts are currently between £16,000 and £38,000, depending on location.
Do you need a deposit for Right to Buy?
Not always. Some lenders may accept the Right-to-Buy discount as the deposit, but this depends on the lender and your circumstances. A separate cash deposit may still be needed in some cases.
Can you get a mortgage for Right to Buy?
Yes, many people use a mortgage to buy their home through Right to Buy. A Right to Buy mortgage is still assessed by the lender, so affordability, credit history and property type still matter.
Is Right to Buy the same as getting a mortgage approved?
No. Right to Buy relates to whether you can buy your home through the scheme. Mortgage approval is a separate lender decision based on your finances, the property and the lender’s criteria.
If you’re buying your council home through Right to Buy, one of the biggest questions is whether you need savings for a mortgage deposit.
The short answer is: some lenders may accept your Right to Buy discount as deposit, which means you may not need a separate cash deposit. But this isn’t guaranteed. It depends on the lender, the size of your discount, the property, your income, your credit history and whether the mortgage is affordable.
A Right to Buy discount can make a big difference to the amount you need to borrow. But a Right to Buy mortgage still has to meet lender criteria, so it’s important to understand how the deposit side works before you apply.
Right to Acquire is a separate scheme with different discount rules. If you rent from a housing association, our guide to Right to Buy and Right to Acquire can help you understand which scheme may be relevant before looking at the mortgage figures.
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Can your Right to Buy discount be used as a deposit?
In some cases, yes. Some lenders may treat the discount you receive through Right to Buy as your deposit.
This can be helpful because the discount reduces the price you pay for the property. Instead of saving a traditional 5%, 10% or 15% cash deposit, your discount may create enough equity for the lender to consider the mortgage without you putting in extra money.
For example, if your home is worth £160,000 and your council sells it to you for £144,000 after a £16,000 discount, some lenders may consider lending the full £144,000 purchase price without you adding a separate cash deposit.
That said, lender treatment varies. Some may accept the discount instead of a separate cash deposit, while others may apply different deposit or loan-to-value requirements.
This is also reflected in the official government guidance, which notes that some lenders treat the Right to Buy discount as the deposit while others do not.
This is where qualified Right to Buy mortgage advice can help, especially if you’re unsure which lenders are likely to consider your case.
How a Right to Buy deposit works
With a standard house purchase, the deposit is usually money you contribute from your own savings. If you buy a £200,000 home with a 10% deposit, you pay £20,000 and borrow £180,000.
Right to Buy works differently.
There are three separate parts to understand:
The market value of the property
The Right to Buy discount offered by your council or landlord
The discounted purchase price you actually pay
The discount isn’t cash sitting in your bank account. It’s a reduction in the purchase price. But because you’re buying the property below its market value, some lenders may treat that discount as equity in the property.
That’s why a Right to Buy mortgage deposit can be different from a normal mortgage deposit. In some cases, the discount does the job that a cash deposit would normally do.
That means “no cash deposit” is usually a clearer way to think about it. The key question is whether your lender will accept the discount instead of a separate cash contribution.
Example of a Right to Buy discount as deposit
Here’s a simple example using a £16,000 discount. Actual discounts depend on your circumstances and location, with current regional maximum cash discounts ranging from £16,000 to £38,000.
Item
Amount
Market value
£160,000
Right to Buy discount
£16,000
Discounted purchase price
£144,000
Cash deposit
£0
Mortgage needed
£144,000
In this example, the buyer needs a mortgage of £144,000 to buy a property worth £160,000.
If the lender allows borrowing of 100% of the discounted purchase price at this level of loan-to-value, the buyer may not need to add a separate cash deposit.
However, this still depends on lender criteria. If the buyer has credit issues, high debts, unstable income or the property raises concerns, the lender may take a different view.
You can use a Right to Buy mortgage calculator to estimate your discounted purchase price and see how the numbers could look before speaking to a broker.
Discounted purchase price vs market value
One point that can cause confusion is loan-to-value, often shortened to LTV. With Right to Buy, lenders can apply limits using both the discounted purchase price and the property’s open-market value.
Using the example above:
Market value: £160,000
Discounted purchase price: £144,000
Mortgage requested: £144,000
The mortgage is therefore 100% of the discounted purchase price, but 90% of the property’s open-market value.
This distinction matters because lender criteria differ.
NatWest, for example, currently allows borrowing of up to 100% of the discounted purchase price, subject to a maximum of 90% of the open-market value and its current product LTV limits.
Halifax also says it may accept loans up to 100% of the discounted purchase price, provided the loan stays within its lending limits based on the valuation.
This is one of the main reasons a Right to Buy mortgage with no cash deposit may be possible with some lenders, but not with others.
Why some lenders may still ask for a cash deposit
Even if you have a large discount, a lender may still ask for a cash deposit or extra evidence.
Reasons can include:
The lender doesn’t accept the full discount as deposit
Your affordability is tight
You have missed payments, defaults or other credit issues
You have existing debts or commitments
The property type is harder to lend on
The valuation raises concerns
Your income is harder to evidence
The lender wants to see funds for fees or other costs
A Right to Buy no deposit mortgage should never be treated as automatic. The discount can help, but the lender still needs to be comfortable with the whole application.
You should also remember that no cash deposit doesn’t mean no costs at all. You may still need money for legal or conveyancing fees, surveys or valuations, mortgage fees and other costs involved in buying your home.
What lenders may check before accepting the discount
The discount can improve the equity position, but it does not replace the lender’s affordability checks. Under FCA affordability rules, regulated mortgage lenders must assess affordability using the applicant’s income and expenditure and must not base that assessment on the equity in the property.
If you’re self-employed, the lender may need more detail about your accounts, tax calculations or business income. In that case, it may help to understand your self-employed mortgage options before applying.
If you’ve had missed payments, defaults or other credit issues, you may need a lender that is more comfortable with an adverse credit mortgage case.
Can you get a Right to Buy mortgage with no cash deposit?
Yes, it may be possible in some cases. If the lender accepts the Right to Buy discount as the deposit, and the rest of your application fits their criteria, you may be able to buy without putting down a separate cash deposit.
But this depends on the full situation.
A lender will still want to know that the mortgage is affordable, the property is acceptable security and your credit history fits their rules. They may also want to see that you can cover the other costs involved in buying your home.
Before relying on the discount, check your eligibility and discount amount with your council or landlord. They are the ones who confirm whether you qualify and how much discount you may receive.
What if you have adverse credit?
Adverse credit doesn’t always mean you can’t get a Right to Buy mortgage. But it can reduce the number of lenders available to you.
A lender may look at:
What the credit issue was
How long ago it happened
Whether it has been settled
How your finances look now
Whether the mortgage is affordable
If the discount is strong but your credit history is more complex, it may be worth getting advice before applying.
A failed application can be frustrating, especially if the issue could have been avoided by choosing a more suitable lender.
Getting mortgage advice before applying
Right to Buy can be a strong route into home ownership, especially if your discount reduces or removes the need for a cash deposit.
But lender criteria can vary. One lender may accept the discount as deposit, while another may ask for extra cash or decline the case for a different reason.
A broker can help check which lenders may consider your discount, how they may assess your loan-to-value, and whether your income and credit profile are likely to fit.
If you’re buying your council home and are unsure whether your discount could work as your deposit, Monday Mortgages can help you understand your options before you apply. You can get help with a Right to Buy mortgage and check whether a lender may accept your discount instead of a separate cash deposit.
Can I use my Right to Buy discount as my mortgage deposit?
Some lenders may accept your Right to Buy discount as your deposit. This means you may not need a separate cash deposit, but it depends on the lender and your wider application.
Do I need savings to buy my council house?
Not always. Some buyers can use their discount instead of a cash deposit. However, you may still need savings for legal fees, valuation fees, moving costs or other purchase costs.
Can I get a Right to Buy mortgage with no cash deposit?
It may be possible with some lenders if they accept the discount as deposit and the mortgage is affordable. It isn’t guaranteed, and lender criteria can vary.
Do all lenders accept the Right to Buy discount as deposit?
No. Some lenders may accept the discount as the full deposit, while others may want a separate cash deposit or apply different rules.
Does bad credit affect using the discount as deposit?
Yes, it can. Credit issues may limit your lender options, even if the discount means you’re borrowing less relative to the property’s market value.
Can self-employed applicants use the Right to Buy discount as deposit?
Potentially, yes. The lender will still need to check your income evidence, affordability and wider application before deciding.
