Do I Need a Deposit to Buy My Council House?

Home » Insight » UK Mortgages » Do I Need a Deposit to Buy My Council House?

If you’re thinking about buying your council house, you’re likely wondering, “Do I need a deposit to buy my council house?” The short answer is: not always – but it depends on your circumstances, mortgage lender, and how much discount you’re entitled to under the Right to Buy scheme.

Let’s break it down in plain English.

Table of Contents hide

1 What Is the Right to Buy Scheme?

2 So, Do I Need a Deposit?

2.1 1. Buying Outright (No Mortgage)

2.2 2. Using a Mortgage

3 Things to Consider

4 Can I Get Help with the Costs?

5 FAQs

What Is the Right to Buy Scheme?

Right to Buy is a government initiative that allows council tenants in England to buy their homes at a discounted price. If you’ve been a secure tenant for at least three years, you may be eligible. The longer you’ve lived there, the bigger your discount could be.

This discount plays a big role in how much you need upfront when it comes to buying.

Ready to buy your council house?

Speak to one of our Right to Buy mortgage specialists today – no jargon, just straight answers.

Contact us now

So, Do I Need a Deposit?

It depends on how you plan to finance the purchase:

1. Buying Outright (No Mortgage)

If you’ve saved enough or have access to funds – and you want to buy the property outright – you don’t need a deposit. The full amount (minus your discount) just needs to be paid on completion.

2. Using a Mortgage

If you need a mortgage, which most people do, some lenders may still ask for a deposit. But here’s the good news:

Some lenders accept the Right to Buy discount as your deposit.

That means, if your home is worth £200,000 and you’re getting a £60,000 discount, the lender sees it as if you’re already putting down 30%. In this case, you might not need to add any extra money.

However, not all lenders work this way, and some might still want a 5–10% deposit on the discounted price.

Find Out If You Need a Deposit to Buy Your Council House

Things to Consider

Credit History Matters: Even if your discount covers the deposit, lenders will still look at your credit score, income, and outgoings to decide if you’re a safe bet.
Legal Fees and Other Costs: Even if you don’t need a deposit, you’ll still need to budget for solicitor fees, survey costs, and possibly mortgage arrangement fees.
Leasehold vs Freehold: Many council homes (especially flats) are sold on a leasehold basis. Make sure you understand the responsibilities and potential extra costs involved.
Service Charges: If you’re buying a flat, expect to pay service charges – and they can go up.

Can I Get Help with the Costs?

Yes. Some local councils and housing associations offer Right to Buy advisers who can guide you through the process. There are also mortgage brokers who specialise in Right to Buy mortgages – they’ll know which lenders are open to using your discount as a deposit.

FAQs

Can I use my council house discount instead of a cash deposit?

Yes, many lenders treat your Right to Buy discount as a substitute for a deposit. This means you may not need to put down any extra money yourself. However, some lenders still require a small deposit on top, so it depends who you go with.

What if I don’t have any savings — can I still buy my council home?

Possibly. If your discount is large enough and you find a lender that accepts it as a deposit, you might not need any upfront savings. But you’ll still need to cover other costs like legal fees, surveys, and possibly mortgage application fees.

Is it harder to get a mortgage for a Right to Buy home?

Not necessarily, but some lenders are pickier about council homes. You’ll need to meet standard mortgage criteria – things like income checks and credit history. Flats and maisonettes might be trickier to mortgage than houses.

Do I have to live in the house after I buy it?

Yes. Right to Buy is for your main home, not a buy-to-let. If you sell it within five years, you may need to repay some or all of the discount. Councils also have first refusal if you sell within 10 years.

Can I buy my council house with someone else?

Yes, you can buy it jointly with up to three family members, as long as it’s their main home too. They don’t have to be listed on the tenancy, but they must have lived there for at least 12 months.

What happens if I’m refused a mortgage?

If you’re turned down, you’re not alone. It’s worth trying another lender or speaking to a broker who deals with Right to Buy cases. They might find a lender who’ll work with your situation, even if your credit score isn’t perfect.

Do I need a financial adviser to go through Right to Buy?

Not legally, but it’s a smart move. A mortgage adviser can explain your options, help you understand the risks, and connect you with lenders who are Right to Buy-friendly. It could save you time, stress, and even money in the long run.

Can I apply for Right to Buy if I have rent arrears?

No. You need to be up to date with your rent and not have any legal action pending from the council. You’ll need to sort out any arrears before your application can move forward.

Continue Reading