Right to Buy
A simpler path to Right to Buy mortgages
At Pepper Money we are here to provide a human approach to mortgage lending. We understand real-life happens and blips should not prevent ambitious Hopeful Homeowners from buying their first home or taking the next step from renting. Not all customers are suited to computerised, credit score-based lending and that’s why we look past a credit score and see the person behind the numbers.
What is Right to Buy?
Right to Buy is a government scheme that has helped millions of people purchase their property since the 1980s. The scheme allows eligible council and housing association tenants in England to buy their home with a significant discount in line with the consumer price index (CPI). So, if you are an eligible council tenant it is a great opportunity to get on the housing ladder and make the changes you’ve always wanted to your home. Plus, your home could be a valuable asset for you and your family and an investment for the future. For further information on the scheme, please visit Right to Buy Scheme
Are you a hopeful homeowner?
Our handy guide explains how the Right to Buy mortgage application process works, step by step
Applicant contacts council to purchase the property by completing an application form (RTB1)
The council reviews the application form and provides landlord's notice in response to tenant's right claim
If accepted then a valuer sent by the council will inspect and calculate the property value (including EPC rating)
The council will send the landlord's offer notice (Section 125 Notice) with the final purchase price and discount
Applicant is required to write to the council within 12 weeks of the notice to confirm what they are to do
Upload your documents
Applicant uploads documents to the broker – Some of the typical documents required are listed here
One of these essential documents:
- Valid passport
- Valid photo card driving license (full or provisional)
- National Identity Card Firearms certificate or shotgun license
- Identity card issued by the Electoral Office for Northern Ireland
One of these additional documents:
- Current council tax bill or
- Statement non-internet generated bank statements or
- Credit card statements or utility bills
Brokers submits application with Pepper Money
A valuation will be conducted by an independent surveyor on our behalf
Pepper Money issues a mortgage offer
Documents & funds exchanged
How we help
General questions about Right to Buy
Here are the answers to some frequently asked questions from our broker partners that could help you.
What would a broker recommend to customers to ensure they are fully prepared?
Before applying for a mortgage it would be beneficial to take an evaluation of your financial position. This means a review of your income and outgoings over at least a 6 – 12 month period. The aim would be to assess if you can meet the payment terms of a mortgage and factor in fluctuations in outgoings.
Unlike many mortgage lenders, Pepper Money do not make lending decisions based upon your credit score. However, it is recommended you review your credit score and file before you apply. There are four UK credit reference agencies TransUnion (previously Callcredit), Equifax, Experian and Crediva.
Customers can check all credit reference agencies using Checkmyfile, but please note that payment will be required thereafter. However, there are other free companies such as Clearscore, Credit Karma & TotallyMoney
Which documents are most important?
To process a mortgage application, there are typically 3 types of documents required;
- Applicant Information – If requested, we’ll require two forms of identification. At least one of them must be from the ‘Essential Documents’ list above. Please ensure that the documents are certified as a true copy of the original and where applicable, a true likeness of the applicant to avoid any delays.
- Income and Employment – You will need to demonstrate 12 months of continuous employment history. This may include but not limited to Business Bank Statements & annual accounts if you are self-employed. This can usually be done by providing your most recent P60 or last payslip from the previous financial year.
- Adverse Credition – An explanation is needed for adverse credit events if you have missed repayments in the past. In addition, for CCJs or defaults, we’ll need an explanation as to how the event came about. The easiest way to do this is by including an explanation in your Application Background summary.
- DMP Form – If you are applying for one of our Debt Management Plan products.
How long does the process take?
According to gov.uk once you have completed an application form (RTB1), the landlord has up to 4 weeks to reply confirming whether you have the Right to Buy. Your landlord has up to 8 weeks to send you an offer notice for a house. For further details please visit the Right to Buy – Summary Booklet.
How to speed up the process and avoid declines?
When applying for a Right to Buy mortgage the first step can be considered the most important. The issuing on an accurate Landlord’s offer Notice/Section 125 can reduce and limit later delays. Therefore it is important that the names on the document are identical to the individuals which will be applying for the mortgage.
Once all documentation has been provided we would recommend that you remain engaged and proactive throughout the process. This will include ensuring the property is presented in the best condition ahead of survey and monitoring the progress of legal work.
Pre-completion expenditure budget
Once you have engaged with an intermediary and lender, we would recommend prior to submitting your mortgage application you assess any potential additional costs you may be required to pay to complete your mortgage. This will include but, is not limited to, the following:
- Stamp Duty
- Conveyancing fees
- Survey fees
- Mortgage arrangement fee
- Mortgage broker fees
Post-completion expenditure budget
With your offer accepted and your mortgage application underway, if you have not already, we would recommend that you devise a plan of your estimated monthly income and expenditure. However with the current trends with inflation it may be useful to include an incremental increase to your variable costs. This may include but, is not limited to, the following costs:
- Council Tax
- Water, gas and electricity bills
- Building & Contents insurance
- Life Insurance
- Service Charge
- Residents parking
Importance of miscellaneous fund
Becoming a homeowner has a number of benefits. It can be said you are likely to have an increased amount of security and stability compared to renting.
However, there are hidden and unexpected costs that could likely arise when you are least expecting it. It is recommended to allocate a fund for unexpected repairs, appliance replacements or upgrades.
A recent consumer survey conducted by Which in March 2023, revealed an estimated 2.5 million households have missed a payment on their mortgage, utility bills and credit cards.
Missed payments can have a detrimental impact on your credit score and therefore could reduce the options when you decide to remortgage.
We would highly recommend you stay abreast of your monthly bills and associated contract terms. However, it is imperative that in the event you anticipate potential challenges with making payments, it is recommended to contact your mortgage, credit card, utility provider or other bill source weeks or months before the payment is due.
Keep your costs down - Recommended sites
Whether it is your internet bill, your utility bill or your TV bill, you are more likely to agree to a fixed term contract.
Once the fixed term expires you may be charged at an increased rate, therefore it is important to record and monitor when each fixed term will expire. This will help you identify an alternative agreement at a reduced rate, prior to the expiration of the fixed term.
There are numerous comparison sites that you can refer to when searching for an alternative provider. This includes, but is not limited to, the following:
- Compare the Market
- Credit Karma
- Other price comparison websites
Frequently asked questions
At Pepper Money, we’re ready to challenge convention, read between the lines and see the story behind the numbers.
Thinking about applying?
We have the answers we often get asked by potential applicants.
Application in progress?
Read our FAQ's in you're in the process of applying for a mortgage.
Got a mortgage with us?
If you have a mortgage with Pepper Money, we have all you need to know.