Mortgages for Ex-Local Authority Properties

In today’s financial climate, it can be difficult to raise enough deposit and afford the repayments on even a modest home, especially in the south of the country. One way around this is to look at getting a mortgage for an ex-council property, which are often cheaper. 

Here we look at how to go about getting a mortgage for ex-local authority homes, what considerations lenders will make, and how this may vary depending on the type of property you’re looking to buy.

Can you get a mortgage on an ex-council or local authority property?

Yes, you absolutely can, although it can be more difficult. This is because many lenders consider council homes to be less desirable, which can reduce their resale value. 

Many have also been built to a lower standard than traditional brick and mortar properties, as councils will have focussed on providing a large number of homes cheaply and in a short period of time. For example, some council homes built in the 1950s and ‘60s were prefabricated, which is a non-standard construction type.

If there’s cladding, usually more likely to be present on high rise property, lenders can be reluctant to lend unless there is an EWS1 form to show it’s been inspected and approved by a professional surveyor. External walkways, balconies and communal front entrances can also be problematic. However, all lenders have different criteria so it’s not necessarily impossible to get a mortgage, even if the property has all of these concerns.

Ex-council houses

It’s possible to get a mortgage on ex-council houses and other ex-local authority homes, such as housing association houses, although they are much less likely to sell off their housing stock than councils. However, due to the higher risk often involved in lending on this type of property, it’s likely that the lender will offer a slightly lower LTV than on a standard house. 

Other specific concerns that lenders may have about ex-council houses are location, percentage of other local council property and resale potential. 

Ex-local authority flats

Ex council and local authority flats can be a bit more difficult to get a mortgage for. For example, they may not lend on properties of 5 storeys high. It’s also likely that the LTV offered on council flats will be lower than that of council houses, especially if they’re in a high-rise block. 

Specific concerns lenders may have relating to ex-local authority flats would be the height of the block, even if they are comfortable lending above 5 storeys, there are higher maintenance costs involved with maintaining windows and other features of high-rise property. Cladding is also a particular concern for tower blocks. There may also be limits on the minimum size of the property, as many lenders will not approve a mortgage on property with less than 30 square metres, which may apply to some council flats. 

Others property types

Single storey homes tend to be in fairly short supply in the UK but if you are looking to buy an ex-local authority bungalow or maisonette, there are funding options available. However, you will need to secure a mortgage with the right lender, as criteria can vary and not all lenders will consider this type of property. 

Similar considerations will apply as with local authority councils or flats.

Full lending criteria

You’ll need to qualify for the same criteria as any other mortgage on a personal level, so this will include matching affordability, credit score and age limits. However, when purchasing ex-council homes, there will be more property-specific criteria to meet than with other homes, this will likely include some or all of the following:

• Building survey - lenders may need a full property survey, rather than just a valuation for a mortgage on this type of property. This will look at location, size, condition and materials, resalability, percentage of local council homes and future council plans 
• Leasehold status - many ex-council properties are leasehold, which means that the relevant local authority will likely still own the land that the home is built on, even though the homeowner owns the property. This is considered less desirable than a freehold property due to resale restrictions, so lenders will want to know the length of the remaining lease, whether there are any ground rent or service charges to consider (which could impact your affordability) and restrictions imposed by the lease agreement
• Legal and Regulatory Compliance - due to substandard construction methods, many council properties have been imposed subsequent safety and building standards that they must comply with. Lenders will likely want to assess that all of the relevant compliance certificates are in place, including building regulations, planning permissions  and safety standards

How to get a mortgage on an ex-local authority home

It can be more difficult to find lenders willing to invest in this type of home, so it’s a good idea to use a whole of market broker, like ourselves, to check criteria for you. We’ll be able to match you with those lenders who are more open to approving a mortgage for this type of property, saving you the time and stress of rejections with other lenders. 

You can get started with a mortgage broker who specialises in these properties below:

Get tailored advice on ex-local authority mortgages

Speak To An Adviser

Which mortgage lenders are available?

Finding a mortgage for an ex-local authority home can be difficult as there are fewer lenders happy to lend on this type of home, with flats even harder to find lenders for than houses. It may be possible to get a Halifax mortgage on ex-local authority houses, although they have minimum leasehold requirements and building standards to comply with. Natwest may also look at ex-local authority applications on a case by case basis.

However, for the best chance of approval on this type of mortgage, it might be best to look at more specialist lenders, who tend to have more flexible lending criteria around non-standard properties. As a whole of market brokers, we can look at every lender available to see which ones have the most suitable criteria for your needs.

Are there any schemes you could consider?

There are a couple of schemes available that may help with this type of purchase, but again, not all lenders will allow applications made through these schemes. If you’re looking to buy an ex-council house or flat through a home ownership scheme, speak to our helpful team about your mortgage options. 

If you’re looking to buy your current council home, the Right to Buy scheme may allow you to do so at a discount, although this discount reduces on 21 November 2024. The amount of discount you’re entitled to increases the longer you’ve been a local authority tenant, and some lenders may let you use this discount in lieu of a cash deposit. 

The Right to acquire scheme is similar, but applies to those in rented housing association properties. These are fairly hard to come by, however, as not many housing associations sell off their properties.

Why choose Teito for your mortgage needs?

Teito specialises in finding mortgages for every kind of home, so if you’re looking for a lender to finance a local authority property, we can help you source the right one. Our knowledgeable team knows the criteria of each lender and what they’ll be looking for from your property, so we can foresee potential issues before you get to the application stage. 

We also offer your initial, no obligation consultation completely free of charge, so you have nothing to lose by making an enquiry. Reach out to us, here at Teito today for your ex-local authority mortgage needs.