Right to Acquire Mortgages: A Comprehensive Guide to Buying Your Home

Introduction to Right to Acquire Mortgages

For many housing association tenants, the Right to Acquire (RTA) scheme presents a valuable opportunity to transition into homeownership, often serving as a pathway for tenants to purchase their first home. The scheme provides eligible tenants with a discount on the market value of their rented property.

The Right to Acquire is a government scheme designed to help tenants secure an affordable right to acquire mortgage and step onto the property ladder.

But while the offer is appealing, understanding how the scheme affects mortgage eligibility is crucial. This guide breaks down the full process of purchasing your home under Right to Acquire and the mortgage considerations involved.

What Is the Right to Acquire?

Right to Acquire allows housing association tenants to buy their home at a discount, typically ranging from £9,000 to £16,000, depending on the property’s location. To qualify, you must:

• Be a housing association tenant with a secure or assured tenancy for at least 3 years.

• Be purchasing a property that was built, bought, or transferred from a council since the same date (March 3, 1997) and acquired with public funds.

• Use the property as your main and only residence.

• Not be under bankruptcy proceedings or subject to a possession order.

Council tenants are eligible for the Right to Buy scheme, while housing association tenants may qualify for the Right to Acquire scheme. Tenants renting from a private landlord are not eligible for these government buy schemes.

This scheme is distinct from Right to Buy, which applies to council tenants. The property must also be eligible some rural, supported housing or shared ownership properties may be excluded.

Both Right to Buy and Right to Acquire are government schemes designed to help tenants purchase their homes.

Eligibility Criteria

To take advantage of the Right to Acquire scheme, you must meet certain eligibility criteria set out by the government. First and foremost, you need to be a housing association tenant who has rented from a public sector landlord for at least three years.

Public sector landlords include housing associations, local councils, the armed services, NHS trusts, and NHS foundation trusts. Your property must be self-contained and serve as your only or main residence.

You will not qualify if you are currently involved in bankruptcy proceedings or if a court has ordered you to leave your home. Meeting these criteria is essential to move forward with the acquire scheme and secure your housing association home at a discounted price.

If you’re unsure whether you meet the eligibility criteria, it’s a good idea to check with your landlord or a specialist mortgage broker before starting your application.

Housing Association Properties: What Can You Buy?

Not every property managed by a housing association is eligible for the Right to Acquire scheme. To qualify, the housing association property must have been built or purchased by a housing association and funded by a social housing grant provided by the Housing Corporation or your local council after March 31, 1997. Properties that were transferred from a local council to a housing association after this date may also be eligible.

The property must be self-contained and your main residence. Both flats and houses can be acquired under the scheme, provided they meet these criteria.

Before you apply, it’s important to verify with your landlord that your property is eligible under the Right to Acquire scheme, as some homes such as those in rural areas or with special support may be excluded.

Acquire Scheme Rules and Regulations

The Right to Acquire scheme operates under a set of rules and regulations designed to ensure fairness and clarity for housing association tenants. The scheme allows eligible tenants to acquire their homes at a discounted price, with the discount amount depending on the property’s location typically between £9,000 and £16,000. To benefit, you must have had a public sector landlord for at least three years, and your property must be self-contained and your only or main home.

You’ll need to follow the official application process, which includes submitting an application form to your landlord. It’s also important that your landlord is registered with the Regulator of Social Housing. Understanding these rules and regulations is key to a smooth application process and to making the most of the right to acquire scheme.

How the Application Process Works

1. Application Submission
   Submit a Right to Acquire application form to your housing association.

2. Landlord Response
   The landlord has 4 weeks to confirm your eligibility or 8 weeks if you’ve been a tenant for less than 3 years.

3. Offer Notice
   Before the offer is made, your property will be valued by a qualified surveyor to determine its market value. You’ll receive an official offer (known as an S125 notice), detailing:

• The property’s market value.

• The discount applied.

• Purchase conditions and responsibilities.

• For flats or leasehold properties: a 5-year estimate of service charges.

4. Decision Window
   You have up to 12 weeks to accept the offer, secure a mortgage, and appoint a solicitor.

5. Completion
   After legal checks and mortgage approval, you complete the purchase. If you decline the offer, you can remain as a tenant with no penalty.

Financial & Mortgage Implications

1. Discount as Deposit

Some mortgage lenders will allow the Right to Acquire discount to be treated as part—or all—of your deposit. However:

• Not all lenders accept this, so confirming early is key.

• You may still need to provide a cash deposit of at least 5% to access better rates.

• The higher the deposit (including the discount), the more favourable your interest rates. A larger deposit can help you save money by qualifying for better mortgage deals that may not be available otherwise.

2. Borrowing Capacity

Lenders assess your affordability using criteria like income, credit history, and outgoings to determine how much you can borrow. While typical income multiples are around 4 to 4.5 times your salary, some buyers may qualify to borrow more with joint applications or through specialist lenders.

Many lenders have different lending criteria, so it’s important to compare options to find the most suitable Right to Acquire mortgage.

3. Early Sale Restrictions

If you sell your home:

• Within 5 years: You must repay part of the discount.

  • Year 1: Repay 100% of the discount.

  • Year 2: 80%, Year 3: 60%, Year 4: 40%, Year 5: 20%.

• Within 10 years: You must first offer the property back to the housing association at full market value. If they decline, you can sell it on the open market.

Mainstream Lenders That May Support Right to Acquire Mortgages

These are some of the main high street lenders who may support Right to Acquire mortgages:

Specialist Lenders for Right to Acquire Mortgages

These specialist lenders have teams of mortgage specialists with expertise in helping applicants secure an affordable right to acquire mortgage, even if they struggle with mainstream bank criteria. These lenders may charge higher interest rates or fees, but they can be more accommodating for buyers who need tailored solutions.

Tips to Secure Your Right to Acquire Mortgage

If you currently rent or are renting from a housing association, the Right to Acquire scheme can help you transition from renting to homeownership by allowing you to purchase your home at a discount.

1. Secure a Mortgage in Principle Early
   This shows you’re a serious buyer and helps speed up the legal process.

2. Confirm Discount Usage
   Ensure your lender permits the RTA discount to be used as part or all of the deposit.

3. Budget for Costs Beyond the Deposit
   Expect to pay for conveyancing, surveys, mortgage valuations, and possible arrangement fees.

4. Check Credit Score and Documents
   Clean up any issues on your credit report and gather payslips, ID, and proof of address before applying.

5. Work With a Broker Experienced in RTA
   A broker can match your situation to lenders most likely to accept your application and help with any appeals.

6. Check the Qualifying Criteria for the Right to Acquire Scheme
   Make sure you meet the qualifying criteria, as only eligible tenants who rent from a housing association can benefit from the scheme’s discounts and mortgage options.

Common Mistakes to Avoid

Applying for the Right to Acquire scheme can be straightforward, but there are common mistakes that can delay or even derail your application. One frequent error is not checking that you meet the eligibility criteria such as having a public sector landlord for at least three years or ensuring your property qualifies under the scheme.

Another pitfall is not consulting a specialist mortgage broker who understands the right to acquire scheme and can help you find the best mortgage deal for your circumstances.

Applicants sometimes overlook the impact of the discount on the purchase price or misunderstand the application process, leading to missed deadlines or incomplete paperwork. To avoid these issues, always verify your eligibility, understand the scheme’s rules, and seek advice from a specialist mortgage broker who can guide you through each step and help you secure the right mortgage.

What Happens After Purchase

Once you’ve successfully acquired your housing association home through the Right to Acquire scheme, you’ll officially become a homeowner. This means you’ll take on new responsibilities, including maintaining the property, paying your mortgage, and covering costs like council tax and utility bills. If you decide to sell your home within five years of purchase, you may need to repay some or all of the discount you received under the scheme.

It’s important to fully understand the terms and conditions of the right to acquire scheme, as well as the ongoing financial commitments of homeownership. If you have questions or concerns, a specialist mortgage broker or financial advisor can help you plan for these responsibilities and ensure you’re prepared for life as a homeowner.

Conclusion

The Right to Acquire scheme is a powerful stepping stone into homeownership for housing association tenants. With discounts lowering the purchase price and the possibility of using that discount as a deposit, this route offers a genuine chance to build equity without the full upfront cost.

However, success depends on securing the right mortgage. Not all lenders treat RTA purchases the same, and navigating discount rules, property criteria, and lender restrictions can be tricky without expert guidance.

Our team specialises in Right to Acquire mortgages and can walk you through every step matching you with suitable lenders, reviewing your documents, and maximising your chances of approval.

Get help from an experienced mortgage broker.

You can speak to one of our specialist mortgage brokers who would be able to guide you through the process. They will advise if there is a lender available and the maximum loan amount based on your circumstances. We are a whole of market mortgage brokerage with access to all lenders. Call us on 01332 470400 or complete the form with your details for us to give you a call back.

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