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Finding a Mortgage for an Ex-Local Authority Flat

Ex-social housing isn't always the easiest property to mortgage - but we have multiple solutions available! The Revolution guide to ex-local authority flats explains everything you need to know to make smart mortgage decisions.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2024-07-17
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Finding a Mortgage for an Ex-Local Authority Flat

Ex-council flats can seem difficult to mortgage. However, this is a popular property purchase choice and can allow you to buy your own home in a central location at an affordable cost.

Here we'll explore why financing on ex-council properties can be a challenge, and what the Revolution Brokers team can do to help.

For more assistance, or to begin your mortgage application process, give us a call on 0330 304 3040, or email us at [email protected].

Why is it Harder to Mortgage an Ex-Local Authority Home?

It might be something your regular bank can't help with, but there are lots of options for mortgaging ex-council homes.

This all depends on:

  • The type of construction - since many council flats are built from concrete, a mainstream lender might consider them non-standard and not be able to offer to lend.
  • Properties considered more valuable, or of high structural integrity, are often easier to mortgage, including those in central London areas.
  • High rises can be more tricky and include flats in a block of seven storeys or higher. Some lenders are reluctant to lend against high-rise properties.

In all of these circumstances, it is still possible to find a competitive mortgage through an experienced broker, who can recommend lenders with experience mortgaging this property type.

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Which Lenders Will Offer a Mortgage on a High Rise Flat in an Ex-LA Block?

These flats are typically easiest to mortgage with a niche lender, using an independent broker to negotiate the terms on your behalf.

Ex-council flats and high rise buildings are both seen as higher risk, so it is vital to use a whole-of-market broker rather than applying to a mainstream lender who is unlikely to help.

What are the Eligibility Criteria on an Ex-Council Flat?

Lenders will consider all sorts of criteria before deciding whether they can lend, and at what interest rates, including:

  • Whether the property purchase is leasehold or freehold, leaseholds can be problematic if the lease's length is under 70 years.
  • Nature of the property - if the flat needs significant improvements, has an entrance through a balcony, or is an unusual size, it might need a niche lender.
  • Your income; if you earn PAYE income that will mean assessing your earnings by looking at payslips. Self-employed people or contractors, and employees whose income varies due to bonuses, for example, are best advised to consult a broker to identify the right lender.
  • Deposit - the higher the deposit, the better. Most lenders will need at least a 10% deposit, with some accepting as low as 5%.
  • Credit rating - if you have an adverse credit history, a high street lender might not be able to support your application. In that case, a specialist bad credit lender is often the best solution.
  • Age - some lenders have an age cap of 75 or 85, whereas others have no limit.
  • The security - if you have a low deposit, a lender might need to see other collateral security to mitigate the risk of the loan.
  • Debt to income ratio - lenders will also want to know your regular outgoings, whether you have other existing obligations, and whether you'd still be able to afford the mortgage repayments if your circumstances change, or interest rates increase.

What Makes an Ex-Council Flat Different from a Typical Mortgage?

The challenge for lenders is that many ex-council properties are built from non-standard materials. Mortgage providers also need to calculate the potential resale value of the property.

In many cases, ex-council homes are built in lucrative central locations. They offer a great standard of living, so it's simply a case of finding a lender who is comfortable mortgaging an ex-local authority property.

Are there Landlord Mortgages on Ex-Council Homes?

You can buy an ex-council flat as an investment to let out, through a buy to let mortgage.

You'll usually need a deposit of at least 25% and demonstrate that the rental income will cover up to 145% of the mortgage interest payments each month.

Independent Advice on Mortgages for Ex-Council Flats

For more assistance, or to find your ideal mortgage lender, contact the business loan broker team on 0330 304 3040, or via email at [email protected].

As an independent, whole-of-market broker, we'll help you secure the mortgage you need.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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