Right to Buy mortgage scheme that gives huge discount on homes is being cut

Rachel Reeves has confirmed she is cutting back discounts available through the Right to Buy scheme in a major blow for thousands of families who want to get on the property ladder.

Local authorities will be able to retain the full receipts from any sales from social housing. Right to Buy currently gives those living in council properties a discount of up to 70% of the market value of their home, up to a maximum of £102,400. For homes in London, the maximum discount is £136,400.

The discounts will shrink to £16,000, or to £38,000 for homes in London. In her Autumn Budget, Rachel Reeves said: "Having heard representations from local authorities, social housing providers, and from Shelter, I can today confirm that the government will reduce right-to-buy discounts."

What do you think of the Budget? Email webnews@mirror.co.uk

What is Right to Buy?

Under the existing scheme, you might be able to purchase your home at a discounted rate through Right to Buy the property you're living in is your only or main home, you're a secure tenant and you've had a public sector landlord for three years. This can be a council, housing association or NHS trust, and it doesn't have to be three years in a row.

The discount is based on how long you’ve been a tenant, the type of property you're buying and the value of your home. You get a 35% discount if you’ve been a sector tenant for between three and five years and you’re buying a house. After five years, the discount goes up 1% for every extra year, up to the maximum levels we’ve mentioned above.

If you’re buying a flat, you get a 50% discount if you’ve been a public sector tenant for between three and five years. The discount goes up 2% for every extra year after this, again up to the maximum values. You can use Right to Buy with someone who shares your tenancy, or up to three family members who’ve lived with you for the past 12 months even if they’re not on the tenancy.

If you do buy with someone else, you count the years of whoever’s been a public sector tenant the longest when working out your discount. You might get a smaller discount if your landlord has spent money building or maintaining your home, or if you’ve used Right to Buy in the past. If you’re selling up, you’ll usually have to repay some or all your discount if you used Right to Buy five years previously.