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Right to Acquire – How it Differs from a Right to Buy

by Byrne Anderson
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Since its introduction in the 1980s, the UK’s Right to Buy scheme has helped tens of thousands of council tenants purchase their homes at a reduced price.  Various extensions of the scheme have been discussed over the years, though Right to Buy currently remains exclusive to qualifying council tenants only.

This does not mean that tenants of housing association properties cannot also access a significant discount on the market value of their home. For qualifying tenants, a separate scheme known as the Right to Acquire initiative could pave the way for affordable home ownership.

What is the Right to Acquire?

Introduced in 1996 and overhauled in 2004, Right to Acquire works in a similar way to the government’s Right to Buy scheme. The idea is that if you have been a social housing tenant for a minimum of two years, you may be eligible for a significant discount on the purchase price of your home.

In order for the property to qualify under the initiative, it must have been purchased or built by the social landlord after April 1997. Those who became tenants prior to January 18, 2005 need to have two years of tenancy to qualify, whereas those who became social housing tenants after this date must have at least five years of tenancy to qualify for the scheme.

Exclusions apply for those who have been declared bankrupt, or in any instance where a possession order has been filed against the tenants in question.

What Kinds of Discounts Are Available?

Discounts available under the Right to Acquire scheme are not quite as generous as those of the Right to Buy program. In addition, discounts vary significantly from one location to the next.

As a general guideline, Right to Acquire discounts vary from around £9,000 to £16,000 for qualifying properties.

How Does the Application Process Work?

The first step in the process is to establish whether or not you are eligible under the Right to Acquire scheme. At UK Bridging Loans, we can provide the independent advice and support you need to decide whether or not Right to Acquire is for you.

Getting started, you will need to formally inform your landlord that you wish to purchase the property. You will then receive an offer indicating the price of the property and the discount you are eligible for, after which you will have 12 weeks to indicate your intention to go ahead.

How do I Apply for a Right to Acquire Mortgage?

Technically speaking, there’s no such thing as a specialist ‘Right to Acquire mortgage’. Instead, it’s a case of securing funding for your property purchase via the usual channels. This includes all types of conventional mortgages, along with specialist secured loan options if you are unable to arrange a mortgage.

One of the biggest benefits of purchasing a property under such a scheme is the potential to reduce or eliminate deposit requirements from the equation.  Depending on the lender you work with, you may be able to use some or all of the discount on your property in place of the usual deposit.

For more information or to discuss the benefits of Right to Acquire in more detail, book your obligation-free consultation with UK Bridging Loans today.

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