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Right to Acquire Mortgage

By Kev TilleyCeMAP

Last Reviewed: 9th September 2021

What is the Right to Acquire Scheme?

In this guide, we will explore the criteria that would need to be met in order to partake in the scheme as well as the process required to follow in order to buy the property under the scheme.

What is Right to Acquire?

The Right to Acquire is a government scheme launched in 1996 to enable eligible tenants to purchase the property that they live in.

The scheme covers Housing Association properties leased directly, or via a public sector landlord including councils, NHS trusts or NHS foundation trusts.

In addition to the usual benefits of owning the property, the purchase price is also discounted as part of the scheme. The level of discount available depends on the location of the property.

There are criteria for both the applicant(s) as well as the property that would need to be met to be able to make an application to the scheme.

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The Differences Between Right to Buy and Right to Acquire

The Right to Acquire scheme is different to the Right to Buy that was introduced in 1980 enabling tenants to buy their property from the local authority.

The Right to Acquire scheme is specifically for Housing Association tenants.

What are the Eligibility Criteria for the Right to Acquire Scheme?

As discussed, there are two types of criteria that need to be met in order to make an application to the government scheme. The eligibility criteria for both the applicant and the property are as follows:

The Applicant:

  • Must have been a Housing Association or public sector tenant for a minimum of three years. In addition, the landlord must be registered with the Regulator of Social Housing.
  • For joint applications, the other applicant must be either the person who shares the current tenancy or up to three family members who have lived within the property for at least twelve months
  • The applicant must not have a history of either bankruptcy or previous court order requiring you to leave a property.

The Property:

  • Must have either been built or purchased by the Housing Association after 31st March 1997
  • Transferred from a local authority to a Housing Association after the 31st March 1997
  • The property must also be a self-contained property and be your only or main home.

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What is the Application Process for the Right to Acquire Scheme?

If an applicant feels that they meet the eligibility criteria for the Right to Acquire scheme as stated above, the first step would be to complete the application form, known as an RTA1 form, available from the government’s website.

The form needs to be submitted to your Housing Association landlord who will assess the application and reply within four weeks.

If the Housing Association landlord agrees to sell the property, an offer will be made within:

  • Eight weeks for a freehold property
    OR
  • Twelve weeks for a leasehold property

Should the Housing Association landlord refuse the application, an explanation must be provided, however, there is not an appeal process available.

The landlord has the right to offer the choice of either purchasing the current property or another empty property that they own. Either way, the offer will include details of:

  • The offer price and the calculation details
  • The discount offered and how this was established
  • The property details included within the sale
  •  Any details of known property defects such as subsidence matters
  •  Estimations of any service charges covering a five-year period, if applicable

Following receipt of the offer, the Right to Acquire applicant has twelve weeks to decide whether or not to proceed with the purchase.

Should an applicant opt to purchase the property via the Right to Acquire scheme, they must arrange the necessary funds in the same manner as traditional house purchase, this may include applying for a mortgage.

Right to Acquire Mortgages

Over recent years more and more Housing Association tenants have taken up the Right to Acquire and therefore the mortgage market has responded, with many lenders adapting their financial products to meet the requirements of the scheme.

In some circumstances, a deposit is not required when purchasing a property via the Right to Acquire scheme, depending on a range of factors including the discount offered by the landlord.

However, each lender will have their own criteria and policies in relation to managing the calculations and mortgage eligibility.

It is worth noting that if a deposit is not required, the terms may differ to finance options where a deposit is paid.

In order to access the wider mortgage market and receive expert advice on which lenders specialise within this sector as well as comparing terms between lenders, approaching a mortgage broker is highly recommended.

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Other Right to Aquire Considerations

Should you purchase your property via the Right to Acquire scheme there are a handful of considerations to note as follows:

  • If the property is sold within the five years of ownership, the discount may need to be repaid either in its entirety or partially
  • Similarly, if the property is repossessed by the mortgage lender, the discount may also be forfeited

Right to Aquire Mortgages Summary

In this guide, we have discussed many aspects of the Right to Acquire scheme including what the scheme is, the eligibility criteria for applicants and the related property.

They will also review the application process in order to proceed with purchasing a home via the scheme.

Our friendly team have expert advisors who have access to the whole of the mortgage market as well as holding insight and recent knowledge of which lenders and financial products will be most suitable for your requirements.

Should you need any further assistance with applying for the Right to Acquire scheme, assessing a landlord’s offer or obtaining a mortgage, please feel free to get in touch today.

Call us today on 01925 906 210 or feel free to contact us. One of our advisors will be happy to talk through all of your options with you.

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