Right to Acquire Mortgage

Getting the right to acquire mortgages is a complicated task in the UK but with the right advice and guidance, it can be made much easier. The right to acquire mortgages is a legal right that allows you to purchase your home at a discounted price from the local authority or housing association.

In order to get the right to acquire mortgages, you must first meet certain criteria. You must be a tenant of the local authority or housing association for at least two years and have been living in your home for at least 12 months. You must also be able to demonstrate that you can afford the mortgage payments and have a good credit history.

Once you have met these criteria, you will need to apply for the right to acquire mortgages. This is done through your local authority or housing association and they will assess your application based on their own criteria. Once approved, you will be given a certificate. You can check your local council from here.

Over the years, we have received a lot of queries from people asking about government-backed mortgage schemes.

In this article, we will review the right to acquire a mortgage in the UK. After reading the article, you will understand all you need to know about the right to acquire mortgages and how to secure the best mortgage rate.

If you are renting your property from the housing association, you may have heard that you have the right to purchase your home under the Government Scheme. This scheme is similar to the Right to Buy Scheme by the government, the only difference is that the right to buy is for council tenants and the Right to acquire is for housing association tenants.

The discount you can receive is generally smaller than the Right to buy Scheme. How they work is similar, but we go into more in-depth detail below.

Video on Right to Acquire Mortgage

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Post Topics 

• Check our Video on Right to acquire mortgages
• Take the Quiz on Right to acquire mortgages
• What is right to acquire?
• Do I qualify for the right to acquire scheme?
• Right to acquire mortgages
• What other factors impact my Right to Acquire mortgage eligibility?
• Deposit and Right to Acquire mortgages
• Adverse credit issues and Right to Acquire Mortgages
• Next steps
• FAQs

What is the meaning of the Right to Acquire Mortgage?

The Right to acquire Scheme can allow housing association tenants to buy the home they are renting from the housing association at a discounted price, providing they meet the requirements. This can be extremely beneficial, as it can allow people a chance to step onto the property ladder and own their own home at a discount. The discount can vary from £9000 to £16000 depending on where you live in the UK. It is important to keep in mind that if you sell the property within a period of 5 years after purchasing it, you may be obligated to repay a portion or the entire discount received. If you decide to sell within 10 years of the purchase date, you will be required to offer to sell the property back to your landlord first.

Once you have completed a right to acquire application form, your landlord will reply with his decision on whether he agrees to sell along with a purchase price, the discount that is available and what’s included.

Do I qualify for the right to acquire scheme?

You should also check the property you intend to purchase is eligible under this Scheme. The property must have been built or bought by a housing association after 31st March 1997 or transferred over from a local council after this date. The property must be your only main home and a self-contained property.

You are able to make a joint application with someone who shares your tenancy or up to 3 family members who have lived with you within the last 12 months.

You will not be able to qualify for this Scheme if you are in the process of being made bankrupt or have an outstanding court order to leave your home.

Right to acquire mortgages

Just like any other property or house purchaser, it is your responsibility to finance your house purchase and apply for a mortgage loan. It is important that you understand the costs associated with being a homeowner and ensure that you can afford the monthly repayments otherwise your home could be repossessed, and this can leave a mark on your credit report making it more difficult to source loans in the future.

Many lenders on the market now offer mortgages suited to the Right to acquire Scheme. It is vital to state that you are using the Scheme when applying for a mortgage so that the appropriate mortgage products can be offered to you.

In some cases, lenders may not require a deposit from you if they are able to use the Right to acquire a discount to cover the deposit, but this will vary from lender to lender and how much discount you have been offered. Of course, having a deposit will strengthen your application and possibly unlock more deals available to you with better interest rates.

Most lenders typically require you to have a good credit history or credit score, a form of income and carry out affordability checks. If you do have factors which you think might affect your ability to get a mortgage such as adverse credit, self-employed, outstanding debts and other factors, then a mortgage broker will be able to help assist by looking at their extensive list of lenders and products to find one most suitable for you. Of course, lenders will assess your application on a case-by-case basis but a professional advisor will be able to guide you on how to strengthen your application.

There are other additional costs associated with the process of buying a property such as legal fees and administration fees which you will need to cover yourself.

What other factors impact my Right to Acquire mortgage eligibility?

You need to know about some additional things before you apply for such a mortgage. One of the things is your current income level, including any benefits you receive such as Job Seekers Allowance, Income Support, Universal Credit, etc. Additionally, Your rent should cover at least 50% of your monthly household costs, including bills like gas/electricity, water, Council Tax, TV Licence Fee, internet connection fees, phone bills, insurance premiums etc. Also, it is worth noting that you are automatically exempt from the Right to acquire a mortgage scheme by lenders if you have faced bankruptcy in the past or your home has been repossessed in the past. There is limited mortgage lenders available for your application, so it’s better to contact for a piece of mortgage advice from an experienced mortgage broker.

Deposit and Right to Acquire mortgages

In most cases, the bigger the mortgage deposit, the more the chances of approval. However, there are some rights to acquire mortgage lenders available that can provide you low mortgage deposit.

For such lenders, If you’re applying for this scheme, then you need to pay at least 5% of the purchase price into a deposit account before you close. This money goes towards paying off any existing debts secured on the property. It does not count toward your total deposit amount when calculating how much equity you have available to borrow.

Adverse credit issues

Some mortgage lenders can also provide you with this Scheme if you have a bad credit history. But the chances of you getting a mortgage with a poor credit score directly affect your chances of approval. Therefore, it is better to consult a mortgage expert before going to a lender directly. 

Next steps

Right to acquire scheme can be a great way to own the property you live in and at a discount. If you have checked that you and your property can qualify for the right-to-acquire scheme, you may require a mortgage loan to purchase the property and this will be your responsibility to arrange. If you are unsure or wish to seek professional advice on obtaining a mortgage, then contact us today and one of our mortgage brokers will be in touch to discuss your individual case.

FAQs – Right-to-acquire scheme lenders

Which Lenders will consider me for a Right-to-acquire mortgage?

Some limited lenders can help you to get the Right-to-acquire a mortgage. The best thing here is to do your research and consult a market broker to get the best out of your mortgage process.

What are the different types of properties included in the Right-to-acquire Scheme?

The properties with landlords such as Housing Associations Councils, armed services NHS trusts, and foundation trusts could be counted in for Right-to-acquire mortgage schemes.

Is the Right-to-acquire Scheme available for self-employed mortgages?

Yes, it could be available, but you need to consult a financial advisor.

Can I get the right to acquire a mortgage with bad credit?

Yes, you can get a bad credit mortgage, but you may need to contact a specialist mortgage broker to streamline the complete process.

What is social housing grant?

Social housing grants are given by local councils to people who cannot afford their rent. They are usually used to cover the difference between what they would normally spend on rent and what they actually receive.

Where can I find the “Help to Buy Mortgage guide”?

You can learn more about the “Help to Buy Mortgage” in our previous blog on “Help to Buy Mortgages.”

Can I buy any council house with a Right-to-acquire mortgage?

Maybe or maybe not, there are many other things that you need to consider. It is better to contact ANY online mortgage broker before starting your application process.

Which government mortgage scheme helps to buy a currently rented house at a substantial discount rate?

Eligible Housing Association Tenants Scheme can help you get onto the property ladder by giving you an opportunity to buy your currently rented house.

Can I get a mortgage under the Right-to-acquire scheme?

Yes, you can get a right to acquire a mortgage in the UK but you may need to contact a specialist mortgage broker. As the Right-to-acquire is a government scheme which allows many housing association tenants in England.

What does the Right-to-acquire Mortgage process involve?

Tenants are entitled to a right to acquire a mortgage. A landlord must give reasons for rejecting an application. An applicant may appeal against a rejection. Your landlord has agreed to sell you a house. He/She can give you an offer within 8 weeks of receiving your request. Or he/she can offer you the option to buy another property that he owns but isn’t selling right now. You can either accept or decline this offer.

What other factors impact my Right-to-acquire mortgage Scheme eligibility?

You should check whether you meet all the criteria required by the lender before applying for a mortgage. The following points will play a role:

• Your income (gross)

• Your assets

• Your occupation

• Your credit rating

• Your personal circumstances

• Your family situation

• Any existing loans

However, every mortgage lender has different set of eligibility requirements and mortgage affordability criteria but these are the basic minimum conditions. If you don’t meet any of these requirements, you won’t be eligible for a mortgage.

Can I get a Right-to-acquire mortgage with a smaller or no deposit?

It’s always better to use a bigger mortgage deposit as it increase the chances of approval. In most cases, you won’t able to get a right-to-acquire a mortgage if you have less than 20% down payment. However, there are some exceptions. For example, if you are purchasing a home from a housing association, then you may be allowed to pay a portion of the price using equity from a previous home. If you are interested, you can also contact experienced mortgage brokers before starting your mortgage application process.

Can I get a right-to-acquire mortgage with bad credit?

Yes, you can get a right-to-acquire mortgage with a bad credit history. However, the chances are low but you can always contact bad credit mortgage broker to help you with your application.

Can I get a mortgage under right to acquire scheme?

Yes, you can get a right to acquire mortgage in the UK but you may need to contact a specialist mortgage broker. As right to acquire is government scheme which allows many housing association tenants in England.

What does the Right to Acquire Mortgage process involve?

Tenants are entitled to a right to acquire a mortgage. A landlord must give reasons for rejecting an application. An applicant may appeal against a rejection. Your landlord has agreed to sell you a house. He/She can give you an offer within 8 weeks of receiving your request. Or he/she can offer you the option to buy another property that he owns but isn’t selling right now. You can either accept or decline this offer.

What other factors impact my Right to Acquire mortgage Scheme eligibility?

You should check whether you meet all the criteria required by the lender before applying for a mortgage. The following points will play a role:

• Your income (gross)

• Your assets

• Your occupation

• Your credit rating

• Your personal circumstances

• Your family situation

• Any existing loans

However, every mortgage lender has different set of eligibility requirements and mortgage affordability criteria but these are the basic minimum conditions. If you don’t meet any of these requirements, you won’t be eligible for a mortgage.

Can I get a right to acquire mortgage with smaller or no deposit?

Its always better to use bigger  mortgage deposit as it increase the chances of approval. In most cases, you won’t able to get a right to acquire mortgage if you have less than 20% down payment. However, there are some exceptions. For example, if you are purchasing a home from a housing association, then you may be allowed to pay a portion of the price using equity from a previous home. If you are interested, you can also contact experienced mortgage brokers before starting your mortgage application process.

Can I get a right to acquire mortgage with bad credit?

Yes, you can get a right to acquire mortgage with a bad credit history. However, the chances are low but you can always contact bad credit mortgage broker to help you with your application.