Right to Buy mortgages with Bad Credit

The Right to Buy scheme allows council and public sector tenants in England to buy the home they rent at a discounted price. The maximum discounts are £96,010 (or £127,940 in London), increasing each year in line with the consumer price index.

Do you qualify?


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Author: Carl Shave - CEO and co-founder
Last updated: 30 May 2024

Can I get a Right to Buy mortgage with a bad credit?

Yes, it’s definitely possible to get a bad credit Right to Buy mortgage. However, it’s not always a straightforward process.

Many specialist lenders have now entered the Right to Buy market, providing financing for eligible tenants with bad credit. However, in this situation, the terms and rates offered to you may be affected more than it would be if you had a clean credit record.

You may need to check the options open to you via these specialist mortgage lenders. Many of them don’t operate on the high street or online. Instead, they are only accessible through specialist advisers, such as our team here at Just Mortgage Brokers.

In the next few sections, we’ll cover a things you should consider if you have bad credit. So, if you are wondering whether you can get a council house mortgage under the Right to Buy scheme, read on.

An introduction to bad credit Right to Buy Mortgages

Bad Credit Topics

Whether it be late payments, defaults or CCJs, we’re here to help you secure a mortgage.

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How does bad credit affect a Right to Buy mortgage?

Having adverse credit events can make it harder to obtain a Right to Buy mortgage, but much will depend on your individual circumstances. How a lender will typically react to the bad credit event on your record will be influenced by:

  • The amount of money involved.
  • The severity of the bad credit issue.
  • The amount of time that has passed since the issue.

The more severe these factors are, the more they will impact your chances of obtaining a mortgage. This means that a lender may only accept you if you agree to higher interest rates, costing you more money.

Most high street lenders will shy away from applicants with bad credit events on their records (up to the last six years). You will, therefore, likely need to talk to a specialist lender designed to lend to individuals with bad credit.

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What types of bad credit issues can I get a Right to Buy mortgage with?

We deal with various bad credit issues. Some of the most common ones we have been able to find a mortgage for are:

  • Repossessions – Most lenders will decline you if you’ve ever had a repossession. A handful of specialist lenders may accept if it occurred within the last year, but it will be tough. A few will consider your application if it’s within three years of a repossession. More within the last six years, while many are happy to accept if the repossession occurred over six years ago.
  • Bankruptcy – A select few specialist lenders will consider applications the day after a bankruptcy is discharged. A few more will accept you after 12 months. Most will be willing to view your application if it’s been three to six years since the discharge. Mainstream lenders are likely to decline you altogether.
  • DMP and IVA – Only a few specialist lenders will accept you for a Right to Buy mortgage. But, if the plan was settled three or more years ago, most will be willing to lend to you.
  • Arrears – Most lenders will accept arrears that occurred more than three years ago. There are quite a few who will be fine with some more recent instances. If you are currently in arrears on your mortgage, then it’s unlikely that a lender will accept you for a new one.
  • Default and CCJ – If the issue occurred within the last 12 months, then there may be difficulties. However, there are lenders on the market who will consider applicants with defaults within the last few weeks. Most will be happy to consider you if the default or CCJ was registered three or more years ago.
  • Late payments – If you’re currently behind on other payments, then it’s unlikely that you will be accepted for a mortgage. However, the fewer and further between these late payments are, and the longer ago they were, the more likely a lender is to forgive them.

You may have a low credit rating because you don’t have much, or any, history of borrowing. Therefore, it’s unlikely to have much of an effect. However, lenders may look closer at your current financial circumstances, which helps them, during their affordability assessment, to come to a decision.

As ever, the more time that has passed since the bad credit issues occurred, the less weight they will carry. This is even more true if you’ve taken steps to repair your credit record and have kept a clean slate since. You might also find that a lender’s criteria for those with bad credit might change over time.

At Just Mortgage Brokers, our team are experts in bad credit mortgages. If you have bad credit and want to obtain a right to buy mortgage, get in touch.

Generally speaking, the larger the deposit you can provide, the better the terms will be of your loan. Larger deposits aren’t always necessary, but they can be useful in order to get a more favourable deal.

A larger deposit acts as security on the home loan and shows that you are committed to the mortgage. It will help Right to Buy mortgage lenders for bad credit to see your case more favourably, and make it easier for you to find a mortgage that meets your needs and will help to get your application accepted.

A standard deposit amount for most mortgages is 5%–10%. However, with a bad credit record, 15% to 20% plus could increase your chances significantly.

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Right to Buy Mortgages with Bad Credit FAQs

This depends on the lender. Most lenders will treat your Right to Buy discount as a deposit, but this is not universal and some will still ask for a cash deposit.

This may also affect your choice of lender when looking at mortgages for Right to Buy with bad credit.

The scheme applies to both houses and flats and does not specifically exclude flats in high-rise buildings.

However, some lenders have restrictions on the types of properties on which they lend, so they may not grant mortgages on high-rise flats. Ensure that any lenders or mortgage brokers you speak to are aware upfront of the type of property you want to buy.

The Right to Buy scheme does not have an upper age limit. Some lenders, however, do have upper age limits for mortgage applicants. This is partly because they need to be sure you can afford to keep paying the mortgage, including after retirement.

You can apply for a Right to Buy mortgage jointly with your spouse or civil partner. Alternatively, you can apply with anyone else who shares your tenancy, or with up to three family members you have lived with for the past 12 months. Some borrowers may also be more flexible with their maximum age requirements. This could apply in cases where a Right to Buy mortgage application is made jointly with a younger family member.

It may be possible to borrow extra money against the property to carry out home improvements. This will depend on:

  • The value of the property.
  • The level of the Right to Buy discount.
  • The lender’s maximum loan to value (LTV).

Be aware that, for leaseholds, you may have to get permission from the freeholder before making any changes; this is usually your current landlord.

Buying your property through the scheme doesn’t disqualify you from letting it out afterwards. However, lenders do have a say over this, and it depends on what type of mortgage you take out.

If you intend to let out the property immediately and on a long-term basis, you will need a Buy-to-Let mortgage. It can be more difficult to get a Buy-to-Let mortgage as many lenders will not permit these for Right to Buy purchases.

If you’re thinking about letting the property out in the future, you should apply for a standard mortgage. This is on the basis of requesting their approval to rent the property when the time comes. This is usually called applying for “consent to let” or “consent to lease”.

Lenders vary in their letting consent policies. Some can be flexible as long as the letting is for a limited period (for example: up to two or three years). Other lenders will only give consent in very specific circumstances.

To give an example: if you’re going to be working abroad for a fixed term, there may be fees involved in either applying for consent to let, or in changing from a residential to a Buy-to-Let mortgage.

Why choose Just Mortgage Brokers for your Bad Credit Mortgage?

  • This is our speciality – it’s what we do
  • Direct access to lenders underwriters enabling us to discuss your situation in detail
  • Exclusive deals available
  • Broker only bad credit lenders available to us giving you greater choice
  • Unlimited mortgage broker – giving a wide range of lenders at our disposal
  • Great customer reviews

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