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Can I Buy My Council House While On Benefit?

Wondering if you can buy your council house while on benefit? Read on as we discuss the process, eligibility criteria, and potential challenges of this unique situation.
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Wanting to own a house while on benefits raises quite some valid questions, including the most obvious one, “Can I buy my council house while on benefit?

Well, the answer is YES. Fortunately, even with reduced access to credit due to relying on benefits, it is possible to buy a council house.

However, navigating through this unique scenario requires a nuanced understanding of the application process, financial requirements, and more. 

So, to help you out, this article explains the intricacies of the process, exploring how benefits factor into the mortgage equation and the affordability assessment. 

What Is A Council House?

A council house is a residence owned by the local government and rented to occupants, often situated in socially disadvantaged areas where rents may otherwise be too high. These homes commonly feature affordable rents and secure tenancy arrangements.

Through the Right to Buy scheme, residents of council houses have the opportunity to buy homes at discounted rates. 

Beyond the purchasing option, several councils offer additional benefits like priority for repairs and access to common amenities, enhancing the overall appeal of council housing.

Can I Buy My Council House While On Benefit?

As already mentioned before, you can buy a council house while on benefits. But the catch is that only a handful of specialist lenders available through mortgage brokers will be willing to fund clients whose incomes are entirely based on benefits.

This is because many mortgage lenders typically demand additional income streams alongside benefits. 

That said, the Right to Buy scheme allows most council tenants to buy homes at a discount, provided the property is their primary residence and they don’t have any outstanding debts to the landlord.

Moreover, seeking guidance is imperative to ensure a comprehensive understanding of the potential risks involved. 

While being a council tenant guarantees a place to call home, defaulting on a mortgage repayment could lead to repossession and the subsequent loss of your residence.

Which Benefits Allow You To Buy A House?

  • Severe disability allowance
  • Carer’s allowance
  • Child benefit
  • Widow’s pension
  • Maternity allowance
  • Attendance allowance
  • Disability living allowance
  • Working tax credit
  • Industrial injuries
  • Incapacity

It is important to note that purchasing a house while on benefits means giving up your housing benefits. Consequently, you cannot utilise housing benefits to cover mortgage expenses. 

Moreover, you must know that you qualify for housing benefits only if your savings amount to less than £16,000. 

If your savings exceed this threshold, and you are claiming house benefits and seeking a mortgage while on benefits, the local council may scrutinise your circumstances more closely. This may potentially lead to complications. 

Steps To Buy A Council House While On Benefit

Step 1 – Check online platforms like Zoopla, Rightmove, etc., to estimate the value of your property.

Step 2 – Employ the Right to Buy calculator for potential discount calculations.

Step 3 – Consult a qualified mortgage advisor experienced in Right to Buy schemes. 

Step 4 – Contact the government’s Right to Buy Agent Service or your local authority for guidance and required forms.

Step 5 – Have your property valued by the council.

Step 6 – Receive Right to Buy paperwork detailing property value, purchase price, discount, and additional costs.

Step 7 – Sign and return forms to the council to proceed with Right to Buy.

Step 8 – Apply for a mortgage, provide necessary documents (payslips, bank statements, Proof of Identity, etc.), and appoint a solicitor.

Step 9 – Receive a Mortgage Offer after lender approval.

Step 10 – Lastly, the solicitor will conduct their due diligence, and coordinate with you, the council, and the lender, ensuring a smooth completion of the deal.

Government Schemes You May Consider To Buy Council House On Benefits

1. Preserved Right To Buy Scheme

If your residence was once owned by the council but later sold to a different landlord while you occupied it, you might qualify for the Preserved Right to Buy. This legal entitlement is granted to former local authority tenants who were secure tenants during their occupancy. 

The Preserved Right to Buy operates similarly to the Right to Buy Scheme, offering discounts ranging from £96,000 across England to £127,900 in London.

To determine your eligibility for the scheme, we recommend consulting your landlord. If deemed ineligible, an alternative scheme, the Right to Acquire, may provide assistance. 

Tailored for tenants of housing association homes with a public sector landlord for a minimum of three years, the Right to Acquire Scheme facilitates home purchase at a discounted rate. Discounts range from £9,000 to £16,000, depending on the location and value of your home.

You would be eligible for the same if you were a secure council tenant residing in your home during its transfer from the council to a new landlord. You may also be eligible if you subsequently moved to another residence owned by the new landlord. 

2. Right to Buy Scheme

The Right to Buy Scheme targets current council housing residents, facilitating their home purchase at a significant discount. 

While initially designed for council tenants, there are indications that this scheme may extend to housing association tenants soon. The discount amount varies based on your home’s location and the primary factor is the length of tenancy. 

Eligibility criteria for Right to Buy include the property being your sole and self-contained residence, coupled with the status of being a secure tenant. 

Discounts are also subject to annual adjustments (increased in April according to the consumer price index). So, we recommend consulting your council for the most accurate information.

Moreover, discounts are influenced by factors, such as your tenancy duration and the property’s market value. Typically, tenants with 3-5 years of occupancy can expect a 50% discount, increasing by 2% each additional year, capped at a maximum 70% discount. 

Do You Need A Deposit To Secure A Council House On Benefit

Interestingly, the discount provided by the council can serve as your deposit. While mainstream lenders typically demand a 5% deposit, specialist lenders often accept the council’s discount, eliminating the need for an additional deposit.

However, it’s important to save adequately for additional costs, like broker fees, valuation fees, solicitor fees, etc.

How Much Can I Buy The Property For?

First off, the council will assess your property, determining the discount they are willing to extend. For an initial estimate, you can explore online platforms to gauge the values of similar properties in your locale. 

Also, the government’s Right to Buy Calculator can help approximate the amount of discount you are eligible for. 

By knowing the estimated market value of the property and the discount, you can consider an appropriate mortgage lender.

Here, we recommend seeking the expertise of a mortgage adviser for a comprehensive overview of available Right to Buy mortgage products in the market. Doing so ensures you take a well-informed decision in your journey to homeownership.

Can My Children Buy My Council House For Me?

Under the Right to Buy scheme, your children may buy a council house on your behalf, depending on local regulations. 

Firstly, they must meet the council’s criteria and mortgage the mortgage lenders criteria to be able to do this for you. Successful buyers can then acquire the property directly or set up a trust for administration. This can get complex so advice on this form of transaction is recommended. 

Despite potential cost implications compared to market rates, this approach offers flexibility and security. 

Yet, once again we insist on seeking expert advice to understand local rules and regulations, ensuring a fair and equitable arrangement for all parties involved in the council house purchase.


Purchasing a council house while on benefits is possible, thanks to government schemes like Right to Buy. 

However, understanding the distinct eligibility criteria, deposit requirements, and available discounts is crucial to make a wise decision.

Consequently, it is important to consider factors like tenure and property valuation, consulting qualified professionals, and staying updated on local regulations regarding home ownership.

And before you know it – your dream of homeownership will turn into a tangible reality!

Your home may be repossessed if you do not keep up repayments on your mortgage.

All content is written by qualified mortgage advisors to provide current, reliable and accurate mortgage information. The information on this website is not specific for each individual reader and therefore does not constitute financial advice.

Our goal is simple - to provide most up-to-date and accurate mortgage information to make your mortgage journey as stress-free as possible. Have a question? Fill up the quick form and one of our mortgage advisor will connect with you.

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