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Right To Acquire Mortgage

Are you a tenant planning to purchase the home you currently pay rent for? A Right To Acquire mortgage may be just what you need for this purpose.
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You may decide to purchase your rented accommodation outright to have complete ownership of the property and eliminate the possibility of untimely lease terminations. 

It also helps avoid hassles associated with annual renewals of the rental agreement. 

For this purpose, the government launched the Right To Acquire Scheme in 1996 for properties owned by public sector landlords or housing associations. It allows tenants to buy their rented accommodation through a Right To Acquire mortgage

Let’s understand what these mortgages are in detail. 

What Is Right To Acquire Mortgage?

What Is Right To Acquire Mortgage

A Right To Acquire mortgage is a loan designed to allow tenants to buy their rented property under the Right To Acquire government scheme.

This means only those who qualify for the scheme are eligible for such a mortgage and will have to provide their approval letter to the lender as part of the application typically. .

Such mortgages are designed for those living in rented accommodation for an extended period. Generally, this includes houses owned by housing associations, armed services, and NHS trusts. 

Because of this, there are several additional elements to consider when compared to a standard mortgage

The discount provided can range from £9,000 to £16,000 based on the market price of the property and its location. 

However, it is important to understand that not all lenders may accept your application, even if you are eligible for the Right To Acquire Scheme.  

Qualifying For the Right To Acquire scheme

Certain requirements must be met before you become eligible for the Right To Acquire scheme. 

1. Housing Association Tenant

You should be a Housing Association tenant, having in most cases had a public sector landlord for a minimum of three years. Such landlords can include NHS Foundation trusts, NHS trusts, armed services, and councils.

2. Main Place Of Residence

The property to be purchased should be your main or only place of residence and should be self-contained. 

3. Housing Association Construction 

The property should not have been constructed or purchased by a Housing Association before 31st March 1997. The original funding should be done by a social housing grant from the local council or Housing Corporation. 

Alternatively, the house may have been transferred to a Housing Association from a council after that date. 

4. Registration Of The Landlord

Your landlord should be registered with the Regulator of Social Housing.


You may not be eligible for a Right To Acquire in certain cases, such as:

A. Bankruptcy Or Court Order

If you have been declared bankrupt or have received a court order to vacate the property, you cannot apply for a Right To Acquire mortgage in most cases for obvious reasons.

B. The Property Houses Disabled Or Elderly People

Those residing in houses provided for disabled or elderly people are typically not eligible for the scheme.

C. The House Is Located In A Protected Area

If you live in a house in a rural area falling into the category of a protected area, you may not be eligible for the scheme. 

Right To Acquire Mortgage Vs. Right To Buy Mortgage 

Right to Acquire vs Right To Buy Mortgage

A Right To Acquire mortgage may be considered to be somewhat similar to a right to buy mortgage. This is because the latter also allows you to buy a house at a lower price than its market value. 

However, there are certain differences between the two. For instance, Right To Buy schemes can offer much larger discounts than Right To Acquire in most cases. 

Additionally, Right To Acquire mortgages can be designed for a wider selection of tenants, while a Right To Buy mortgage is available only for council home tenants. 

Getting A Right To Acquire Mortgage

You need to take the following steps to apply for a Right To Acquire mortgage.

1. Check Eligibility

Find out the eligibility requirements for the Right To Acquire Scheme and whether you meet the conditions relating to the property, qualifying period, and tenancy etc..

2. Apply For The Scheme

If you are eligible, apply for it by filling out the RTA1 application form from the government or housing association website and sending it to the landlord.

3. Property Valuation

The landlord will make preparations for the independent valuation of the property to determine its market price once your application is approved.

4. Offer Notice

Upon completion of the valuation, you will get an offer notice or Section 125 notice, which contains information, such as the market value of the house and the discount amount.

5. Financial Assessment

You can then apply for a Right To Acquire mortgage, which will involve researching the market since few lenders offer such a mortgage. This is where an experienced mortgage advisor can come in. 

6. Making The Application

Once you have located a lender offering suitable terms and rates, apply for the mortgage. This will require providing various documents, such as proof of employment, income, and credit history. 

7. Property Survey

Lenders as part of their process conduct a property survey to determine the value of the property before deciding whether to approve the application.

8. Mortgage Offer

All being well when your application is accepted, the loan provider will send a mortgage offer. Following this, legal processes, such as conducting searches and exchanging contracts, can occur. 

How Much Can You Borrow Under Right To Acquire Mortgage?

Several factors determine the amount that can be borrowed, including the following:

a. Property Value

The property value is a major factor determining how much you can borrow, and the loan amount alongside any of your own deposit should cover the property cost after the discount.

b. Deposit

As with other types of mortgages, putting down a larger deposit may offer certain benefits such as lower rates of interest or potentially will allow you to borrow more.

c. Credit History

Borrowers with a good credit history can generally borrow larger amounts since lenders consider the risk to be lower so may offer enhanced affordability calculations. On the other hand, if your credit history is poor, the amount that can be borrowed may be smaller. 

d. Outgoings

Monthly outgoings, such as living expenses, debts, and bills, are also considered by lenders when determining how much to lend. 

e. Income

In most cases, you can borrow 4 to 4.5 times your income, but this also depends on individual circumstances and the lender. 

What Is The Required Deposit?

The amount you need to deposit for a Right To Acquire mortgage depends on various factors, such as the property cost, your credit history, and the lender’s policies. 

Like any other residential mortgage, lenders usually need a deposit that lies between 5% and 10% of the purchase price of the property as a very minimum. But the situation can be somewhat different in the case of a Right To Acquire mortgage. 

The reason is that the discount provided on the market value of the property may be considered a part of the deposit in certain cases. 

This means the actual cash deposit that needs to be put down is smaller or you might not need a deposit at all, dependent on the lender.    

However, few lenders offer such a mortgage, many may require a minimum contribution from the clients own sources in terms of deposit.  

Interest Rates On A Right To Acquire Mortgage

Several factors determine the interest rate on a Right To Acquire mortgage, such as your deposit size, credit history, lender’s conditions, etc. 

Generally, mortgage rates are dependent on various economic factors like the base rate set by the Bank of England. 

In the case of a Right To Acquire Mortgage, such rates are also affected by the discount on the market value of the property. 

This may result in a decrease in the loan-to-value (LTV) ratio, allowing you to enjoy a reduced interest rate. 


1. Can you get a Right To Acquire mortgage with bad credit?

Getting a Right To Acquire mortgage with bad credit can be challenging, but it is still possible.

You can look for specialist lenders who offer such mortgages, even with bad credit, while working to improve your credit score. Typically higher deposits of at least 25% are required for this. 

2. Are there any additional costs or fees associated with these mortgages?

Certain additional charges may need to be paid when applying for a Right To Acquire mortgage. These can include survey costs, mortgage arrangement fees, legal fees, valuation costs, stamp duty, etc. 

3. Can you rent out a Right To Acquire property?

Since a Right To Acquire property has to be your primary or only residence, it cannot be rented out. If you decide to rent it out, the discount amount has to be repaid to the landlord but realistically would just be refused beforehand..

4. Which lenders offer a Right To Acquire Mortgage?

Not all lenders offer a Right To Acquire mortgage, but some of the most famous ones that do include Halifax, Barclays, Nationwide, Santander, and Natwest. 

5. Is the Right To Acquire Mortgage available if you have a private landlord?

Borrowers are only eligible for the Right To Acquire scheme if they have a landlord belonging to the public sector or are tied to them in some capacity. . 

Final Thoughts

The Right To Acquire Mortgage is an ideal solution for tenants who are residing in public sector housing accommodations and wish to purchase the property they reside in. 

By helping lower the property market value through a discount, the government scheme allows borrowers to purchase property they may otherwise be unable to.

However, since few lenders offer this type of mortgage, it is recommended to take the help of a mortgage broker when applying for it. They can help you find a suitable lender that offers reasonable terms and can also provide guidance, making the entire process simpler.

Your home may be repossessed if you do not keep up repayments on your mortgage.

All content is written by qualified mortgage advisors to provide current, reliable and accurate mortgage information. The information on this website is not specific for each individual reader and therefore does not constitute financial advice.

Our goal is simple - to provide most up-to-date and accurate mortgage information to make your mortgage journey as stress-free as possible. Have a question? Fill up the quick form and one of our mortgage advisor will connect with you.

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