Right to Buy discount as a deposit

One of the biggest advantages of the Right to Buy scheme is the ability to use your Right to Buy discount as a deposit. This makes it significantly easier for council and housing association tenants to purchase their home without needing to raise a traditional cash deposit from personal savings. Under a Right to Buy home loan, the discount provided by the local authority or housing association is treated as equity in the purchase.

This structure is commonly referred to as a discounted purchase mortgage. In these cases, lenders assess the mortgage against the property’s open market value rather than the discounted purchase price. For example, if a property is valued at £200,000 and the Right to Buy discount is £70,000, the lender may view the application as a 65% loan-to-value mortgage, even though the borrower is effectively funding 100% of the purchase price. This lower effective loan-to-value can improve mortgage availability and, in some cases, access to more competitive lending terms.

We specialise in arranging Right to Buy mortgage UK products that support discounted purchase structures. Many lenders are familiar with this approach and will assess affordability based on income, outgoings, and overall financial profile while recognising the discount as deposit equity. Using your Right to Buy discount as a deposit removes one of the main barriers to homeownership and allows long-term tenants to convert their tenancy into a secure, long-term investment without needing substantial savings.