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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 8th September 2020*

Can you get a mortgage on an ex-council flat? It’s possible. Ex-council flats are always popular, particularly in busy urban areas where space is at a premium and costs are high.

Of course, ex-council flats can come with their own set of challenges (particularly around financing), so in this piece, we’re going to outline what to expect and look out for if you’re thinking of buying one.

Trying to get a mortgage on a council flat? Get in touch – the expert advisors we work with can help you.

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Can you get a mortgage on an ex-council flat?

Yes! There’s an enormous amount of variety in ex-local authority housing. So, if you’ve decided this is something you want to pursue, it is worth considering the following…

What the flat is made from

Many local authority flats were built in the ‘60s and ‘70s out of concrete. A lot of the time, they were built to prioritise cost savings over quality, and as such – some have structural issues that will deter many lenders.

Where the flat is located (the local demand)

Even if the flat itself isn’t built to a particularly impressive standard, certain areas, such as London, are seen as ‘enough’ to pass a lender’s criteria.

Whether the flat is a high rise, and where the flat is located in the building

Lots of lenders are discouraged by high rises (typically defined as 7 stories and over). If the flat is located in a particularly tall building, lenders might not want anything to do with it.

Again, some mortgage providers may relax this rule for more populous metropolitan areas (which is often where you find high rise flats).

If you’re looking for mortgage providers who specialise in ex-council high rise flats, make an enquiry and the whole-of-market advisors we work with will introduce you to the right lender.

How do I find mortgage providers for ex-council high rise flats?

Niche borrowing like is best conducted through a whole-of-market broker.

Your choice of lenders will likely be thin on the ground as both ex-council properties and high rise buildings are considered specialist areas. With the advisors we work with on your side, though, finding a favourable deal form a lender that understands the nuances of these areas is possible.

With their help, you will have access to all of the best mortgages you qualify for – make an enquiry to get the right advice on your application today.

Whether it’s a freehold or a leasehold

To be fair, the vast majority of flats in the UK are offered as a leasehold, but there are a number of complications that can arise from a leasehold property which a lender may want to know in advance of making you an offer.

This can include the time left on the lease (anything below 70 years is a red flag), and imminent repairs due on the building itself. This can be quite common in ageing ex-council properties, which often require more maintenance.

The design and size of the flat itself

Some lenders won’t consider flats below a certain size, or flats in which the entrance is from a balcony walkway. Many will specify that the kitchen must be separate from the main living area – which can make ex-council studio flats a tough sell.

What affects if I can get a mortgage on an ex-authority property?

The above factors can affect the lender’s perceived risk of the property itself. The below factors affect the provider’s perceived risk of lending to  you.

How much you make and how you make it

The greater your salary, the less of a risk a lender will see you. Ideally, you derive all of your income from PAYE.

If you’re self-employed, or make a sizeable part of your living from things like bonuses or overtime, some lenders may be put off. Not to worry though, there’s a number of more specialist lenders that cater to people with unusual incomes, and the advisors we work with know who they are

The size of your deposit

As far as the lender is concerned – the larger your deposit, the better. For a residential property, the minimum deposit size in the UK is usually 10%, although some lenders may accept 5% under the right circumstances. That said, putting down more than the minimum might help convince the lender to offer you their most favourable rates.

Your credit history

A history of bad credit might reduce the number of lenders available to you, but isn’t necessarily a dealbreaker. If you’re interested, there’s more guidance about this in our bad credit mortgages guide.

Alternatively – the friendly advisors we work with can give you some expert guidance. Get in touch if you want to know more.

Your age

Some lenders won’t lend to people older than a certain age. Some will, but want proof that you’ll be able to make your payments after retirement.

Most mortgage lenders have an upper age limit of 75, some go up to 85 and a minority will lend with no upper age limit under the right circumstances.

You can read more about later-life lending in our mortgages for pensions guide here.

Whether you can offer collateral

As a general rule, lenders will look more favourably on your application if you have something else that you can put up as collateral (i.e. another house). Of course, this is not something to be taken lightly.

Your existing expenditure

By law, lenders are required to ‘stress test’ your finances against interest rate rises. They’ll assess how much you’re already spending and your existing financial obligations. So, it’s wise to shed any unnecessary expenditure that you can, in the months leading up to your application.

Why do mortgage lenders treat local authority flats differently to standard properties?

Ex-local authority flats can be a lot cheaper to buy than some of the more recent new builds – but they can also be a lot harder to get the finance for.

There is still some stigma around ex-authority, both amongst lenders and buyers; even though many are situated in excellent locations and are built under ‘Parker Morris’ standards to be both secure and spacious.

Lenders often label ex-authority as ‘non-standard’, and due to the uncertainty, lenders tend to rely more heavily on the surveyor’s comments about the value and later ‘saleability’ of the property.

Some lenders avoid local authority flats completely, whereas others are open to the idea, providing a number of other very specific criteria are met. We’re going to cover some of these below.

Can I get a buy to let mortgage on an ex-council flat?

It’s possible, but – like all buy to let mortgages, you’ll need a larger deposit and evidence that your projected rent will be able to cover at least 125-130% of your mortgage payments.

Need a little help? Speak to an expert on ex-local authority flats

If you have questions about buying an ex-council property and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 8th September 2020
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.