Can you release equity from a Right-to-Buy property?

If you bought your council home through Right to Buy, you may now have a significant amount of equity in the property, particularly if you received a large discount or your home has increased in value since you bought it. It’s natural to wonder whether you can use some of that to release equity, perhaps for home improvements, to repay other borrowing or for another major expense.

The answer is potentially yes, but releasing equity from a Right-to-Buy property isn’t always as straightforward as looking at the difference between your mortgage balance and the property’s current value. This is particularly important during the first five years after purchase, while the Right-to-Buy discount repayment rules still apply.

In this guide, we’ll explain how equity works after a Right-to-Buy purchase, the difference between simply remortgaging and borrowing more, how the five-year discount period can affect your options, and what lenders are likely to consider if you want to raise additional money. We’ll also explain why the equity shown on paper isn’t necessarily the amount you’ll be able to access.

Can you release equity from a Right-to-Buy property?

Potentially, yes. In this context, releasing equity means increasing borrowing secured against your home and taking some of the difference as cash.

You might do this through a further advance from your existing lender or by moving to a new lender and increasing the mortgage balance. By contrast, a remortgage can simply mean moving lender without borrowing extra.

When we look at a Right-to-Buy remortgage involving additional borrowing, we don’t base the assessment on the headline equity figure alone. We also look at the current mortgage balance, property value, affordability, lender criteria, the reason for borrowing and whether any restrictions or charges could affect the proposed mortgage.

Why you can have equity from the day you buy

Suppose your council home is worth £200,000, but you buy it for £150,000 after a £50,000 Right-to-Buy discount.

	Amount
Market value	£200,000
Purchase price	£150,000
Mortgage	£150,000
Apparent equity	£50,000

The Right-to-Buy discount has created a £50,000 gap between the mortgage and market value. However, that doesn’t mean you could automatically remortgage to £180,000 and withdraw £30,000. During the first five years, the discount repayment rules still matter.

What happens to your Right-to-Buy discount during the first five years?

If you sell a Right-to-Buy home within five years of purchase, some or all of the discount will usually have to be repaid. Under the current rules:

When you sell	Discount repayment percentage
First year	100%
Second year	80%
Third year	60%
Fourth year	40%
Fifth year	20%
After five years	No normal Right-to-Buy discount repayment

The amount repayable can also reflect the property’s value when it is sold. GOV.UK’s April 2026 Right to Buy guidance confirms both the five-year repayment period and the reducing repayment percentages above.

Importantly, this is a sale rule. It does not show how much equity becomes available to borrow each year.

Does 20% of the equity become available each year?

No. This is one of the main points we’d want to clarify before assessing a case.

The 20% annual reduction relates to the potential discount repayment liability. It is not an automatic borrowing allowance.

Whether you can borrow more depends on the lender, affordability, current property value, existing mortgage balance and the purpose of the borrowing. During the discount repayment period, the former landlord can also retain an interest connected with repayment of the discount, so the priority of mortgage charges can matter.

Depending on the property and proposed borrowing, your lender or conveyancer may need information or agreement from the former landlord. Some social landlords specifically use a Deed of Postponement where a lender needs new or additional borrowing to rank ahead of the landlord’s claim. We therefore wouldn’t recommend relying on a simple “market value minus mortgage” calculation during the first five years.

Remortgaging vs borrowing more: what’s the difference?

Option	What it means
Product transfer	Staying with your existing lender but changing deal
Remortgage	Moving your mortgage to another lender
Further advance	Borrowing extra from your existing lender
Remortgage with additional borrowing	Moving lender and increasing the mortgage balance
Releasing equity	Using extra secured borrowing to access some property value

What might lenders look at if you want to borrow more?

Having equity is only one part of the assessment. We’d normally expect a lender to consider:

• current property value and mortgage balance;
• the new loan-to-value;
• income, expenditure and affordability;
• credit history and existing commitments;
• the purpose of the additional borrowing;
• property type and suitability;
• time since the Right-to-Buy purchase; and
• any restrictions or charges affecting the property.

What happens after five years?

Once the standard five-year discount repayment period has ended, that particular complication falls away. Normal lender criteria still apply, including affordability, credit history, property suitability and loan-to-value.

The five-year rule is separate from the ten-year Right-to-Buy right-of-first-refusal rule. If you sell within ten years, you generally need to offer the property back to your former landlord or another social landlord first. Our guide to how Right to Buy works explains the wider scheme rules.

When should you speak to a mortgage broker?

Advice can be useful if you want to change lender, borrow more for home improvements, consolidate borrowing or understand whether waiting until after the five-year period could affect your options.

If you bought through Right to Buy and want to remortgage your home, we can review your equity, affordability and lender criteria and explain which mortgage routes may be realistic.

Where the answer depends on the legal terms of the original sale or the priority of charges, we may also recommend confirming the position with your former landlord or conveyancer. That way, we can assess the mortgage options without making assumptions about equity that may not actually be available to access.