Right to Buy Discount Calculator

How to use this calculator

1. Use the landlord's valuationThe market value is assessed by your landlord, not by you or an estate agent. You can challenge it through an independent district valuer if you think it is too high.
2. Count qualifying years carefullyTime as a public sector tenant counts, and it need not be continuous or in the same property. Time with a housing association may count depending on the circumstances.
3. Check the cash cap for your regionIt varies across England and has been changed by successive governments. It is the cap that binds most often on higher-value properties.
4. Ask about the cost floorIf your landlord has built or substantially improved the property recently, the discount can be reduced or eliminated. Your landlord must tell you if it applies.

Three caps, and the lowest wins

The headline rule is straightforward. A house earns 35% discount after three qualifying years and 1% for each further year. A flat earns 50% after three years and 2% for each further year. Both are capped at 70%.

Flats accrue faster because they were historically harder to sell and the policy compensated for that.

But the percentage is only the first of three limits, and the discount you actually receive is the lowest of the three.

The cash cap is the one most people meet. It is a fixed maximum in pounds, and on a property of any real value it bites long before the percentage does. It varies by region within England and has been raised and lowered by successive governments.

The cost floor is the one almost nobody has heard of, and it is the one that produces the unpleasant surprises. If your landlord has spent money building or improving the property within a set period before the sale, the discount cannot reduce the price below what they spent.

So a tenant of thirty years in a home that was comprehensively refurbished three years ago may find the discount reduced to almost nothing, despite a percentage entitlement of 70% and a long tenancy.

That catches people badly, because the refurbishment was done to the property they live in and feels like a benefit rather than a cost. Your landlord is required to tell you whether the cost floor applies, and it is worth asking early rather than after you have made plans.

A previous Right to Buy discount, on this or another property, is deducted from what you can claim now. The discount is a once-in-a-lifetime entitlement in substance, even though the rules express it as a deduction.

One more limit worth knowing: the discount cannot exceed the value of the property, which sounds obvious but matters where the cost floor and a low valuation interact.

Worked example: a £180,000 house after 15 years

Fifteen qualifying years is twelve years beyond the three-year minimum.

The percentage entitlement is 35% + 12% = 47%.

47% of £180,000 is £84,600.

But the cash cap is £16,000, which is far lower. The cap binds, and the discount is £16,000.

The purchase price is £164,000, and the effective discount is 8.9% rather than 47%.

That gap between the headline percentage and the actual discount is the single most misleading thing about Right to Buy publicity. On any property worth more than about £46,000, the cash cap is what determines the answer, not the years of tenancy.

Which means, on a property of this value, waiting another year gains you nothing at all. The percentage rises to 48% but the cap does not move, so the discount stays at £16,000.

That is worth knowing before deferring an application to build up more years.

Now the cost floor. If the landlord had spent £170,000 building or refurbishing the property within the cost floor period, the discount could not reduce the price below £170,000. The maximum discount becomes £10,000, and even the cash cap no longer binds.

And if they had spent £180,000 or more, the discount would be nil.

Now run a flat instead. After 15 years the entitlement is 50% + 24% = 74%, capped at the 70% maximum. On £180,000 that is £126,000 — but the cash cap still limits it to £16,000. Same answer.

The percentage only decides the outcome where the property is low in value. On an £40,000 property, a 47% entitlement gives £18,800, which exceeds the £16,000 cap. At £34,000 the percentage gives £15,980 and the percentage binds.

So the practical rule is: below roughly £34,000 of value the percentage matters; above it, the cash cap decides. Everything else is detail.

Discount by value and tenancy

The table is almost entirely one number, and that is the point. Above about £34,000 of market value the cash cap decides everything, and neither extra years nor property type changes the answer. The percentages that dominate the publicity are largely irrelevant to most tenants in most of England — check the cap for your region first, because it is the number that determines whether Right to Buy is worth pursuing at all.

Selling, mortgages and whether it is worth it

The discount comes with strings. Sell within five years and you repay some or all of it on a sliding scale — all of it in year one, four fifths in year two, and so on. The repayment is a percentage of the resale value rather than of the original discount, so in a rising market you repay more than you received.

Your former landlord normally has a right of first refusal for ten years. You must offer the property back to them at market value before selling on the open market, and they have a period to decide.

Mortgage lending on a Right to Buy purchase is available but not universal. Some lenders accept the discount as the deposit, meaning no cash deposit is required; others want a cash contribution as well. Flats in blocks with a high proportion of social tenants, or with cladding or lease issues, can be difficult to mortgage.

Leasehold flats carry service charges and major works bills after purchase, and those are the costs that most often catch new owners out. A council block undergoing roof or window replacement can issue a bill running to tens of thousands of pounds, and as a leaseholder you pay your share. Councils must consult before major works, but consultation is not a veto.

There is a five-year cap on service charges for major works after a Right to Buy purchase in some circumstances, which is worth checking with your landlord.

Repairs become your responsibility from completion. A tenant who has never paid for a boiler, a roof or a rewire needs a realistic maintenance budget, and buildings insurance is required.

Beware of companies offering to fund the purchase in exchange for a share of the property or a promise to sell to them later. Several such schemes have been criticised, and some have left occupiers worse off than renting. Any arrangement involving a third party funding the discount deserves independent legal advice.

On whether it is worth it: buying at a discount and paying a mortgage instead of rent can work well, particularly where the mortgage payment is lower than the rent and the property suits you long term. It works less well where the flat is hard to sell, the service charges are high and unpredictable, or the household income is precarious.

Right to Buy has been abolished in Scotland and in Wales. It applies in England only. Housing association tenants may have the Right to Acquire instead, which offers a much smaller fixed discount, and some have a preserved Right to Buy where their home transferred from a council.

Assumptions and limitations

• Applies to England only — Right to Buy is abolished in Scotland and Wales
• The cash cap varies by region and has been changed repeatedly
• Does not model the Right to Acquire for housing association tenants
• Does not calculate the repayment due if you sell within five years
• Does not model service charges, major works bills or ongoing maintenance
• Assumes the landlord's valuation is accepted — it can be challenged
• Not legal or financial advice — take independent advice, especially on any third-party funding offer

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