The discount you receive will be a percentage of the property’s value, calculated based on how long you have lived in your home. The type of property you live in will also be taken into consideration, with a larger discount being offered on flats in comparison to houses.
You are entitled to a Right to Buy discount after living in your property for three years. If you live in a house, this will be 35% of the property’s value, and if you live in a flat you will receive 50%. This discount will then apply for the next two years, until you reach five years of tenancy. At this point the discount will then increase for each additional year that you live in the property going forward. This will be by 1% each year for houses and 2% for flats. You can receive a maximum discount of either 70% of the property’s value, or £82,800 (£110,500 in London), whichever is lower.
As an example, on a property valued at £100,000 which you have lived in for ten years, the discount would break down as follows:
On a house, you would be eligible for a discount of 40% (35% for the first three years, with an additional 1% for each extra year after the five year mark). This would give you a discount of £40,000, meaning you would be able to purchase the property for £60,000.
On a flat, you would be eligible for a discount of 60% (50% for the first three years, with an additional 2% for each extra year after the five year mark). This would give you a discount of £60,000, meaning you would be able to purchase the property for £40,000.
If you are unsure about what discount you may receive, the Government offers a Right to Buy calculator tool at the following link: https://righttobuy.gov.uk/right-to-buy-calculator/