Eligible tenants can still source lower-rate borrowing
Barclays has removed the deposit requirement for homebuyers using the UK government’s Right to Buy scheme, in a move aimed at supporting more renters into homeownership.
Instead of a traditional deposit, the bank will use the Right to Buy discount as equity. This enables eligible borrowers to access lower loan-to-value (LTV) mortgage rates, which typically offer more favourable terms. For instance, a tenant purchasing their home with a 40% Right to Buy discount would be treated as having made a 40% deposit, qualifying them for 60% LTV rates.
The bank will lend up to 100% of the discounted purchase price, as long as this figure does not exceed 90% of the property’s full market value. For higher-value homes — those worth over £640,000 for houses or £310,000 for flats — Barclays can offer up to 85% of the discounted price, subject to a maximum of 80% of the open market valuation. Borrowing is restricted to those with a legal right to buy, though remortgages may be available under certain conditions.
“The Right to Buy scheme has long been a crucial route to home ownership for council and housing association tenants, yet we know that saving for a deposit remains a key obstacle,” said Lee Chiswell, head of mortgages at Barclays. “By lending for the full value of the property, we’re removing the need for buyers to have any deposit at all, helping many completely sidestep their largest barrier to homeownership.”
The policy forms part of a wider strategy by Barclays to improve access to mortgages. Earlier this year, the bank raised its loan ceilings for high LTV products to £640,000 for houses and £310,000 for flats — an increase from previous limits of £570,000 and £275,000, respectively. This adjustment was designed to support more buyers in higher-cost areas with only a 10% deposit.
The high street lender has also introduced features like ‘Mortgage Boost’, which allows family members or friends to increase a buyer’s borrowing potential without directly contributing funds.
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