First Steps on the Property Ladder Courtesy of a Right to Buy Mortgage

A right to buy mortgage is often the only way in which council tenants can avail themselves of home ownership and take their first step up the property ladder. Despite its popularity, the right to buy scheme is often little understood from those who can benefit from it the most and, therefore, many tenants fail to exercise their rights. Although over a million and a half residents have already availed themselves of this opportunity, many more currently qualify but do not understand how the system works.

Essentially, the right to buy scheme allows most council tenants who have resided in their property for over five years to purchase that property at a discounted price to current housing rates. Exceptions to the right to buy scheme include tenants who have been provided with special housing for the handicapped or elderly, and individuals required to live in specific location as a condition of their employment. Once purchased, the new homeowner is required to remain at the residence for a minimum period of time before the home can be sold and certain other resale conditions may also apply. Most council tenants can qualify for a right to buy mortgage so long as they have sufficient income to afford the regular payments and are considered to be in overall good financial health.

The financial benefits to the tenant is obvious, but among the social benefits of the right to buy scheme is that it encourages individuals to remain in place as they become more affluent, providing a healthy level of financial diversity to a given area. This has proved highly successful in creating stable communities throughout large areas of the UK and avoided inner city communities from becoming impoverished ghettos, as is often the case in the large cities of the United States.

While it is not the right approach for every tenant, and not everyone will qualify, understanding the right to buy scheme should become part of every council tenant's basic education. There are many banks and mortgage brokers who specialize in a right to buy mortgage and contacting one will be the necessary first step in availing yourself of this unique opportunity to own your own home.