Council Property

It is fair to say that it is not a straightforward process securing a mortgage on this type of property.
That said, financing houses and low-rise flats that are ex-council properties is generally no more difficult than with any other kind of property, although lenders do appear to prefer purpose-built flats over conversions.
It is the flats that are part of higher developments that really prove problematic.
In the past, it has been the norm for lenders to reject immediately any property that has seven or more floors. Indeed, even still, the majority of lenders have a cut-off point somewhere between the 4th and 6th floors.
Grotty block
The other real issue to consider at the start is what the proportion of ownership is within the block you are buying.
The norm is that at least half must be owned privately.
If the flat is one of many privately-owned within the block and the lender is happy with that, they will still need to know that the flat is not in a grotty block or area.
Lenders will want to feel that the property is presentable and sellable so that, should the worst happen and they need to repossess and sell it on, they can get the correct amount back for it.
The trouble is that these types of properties, along with flats above shops and in lofts, tend to suffer the most in a property slowdown.
Favourable lenders
That said, all these hurdles can be overcome with the use of a quality independent broker who will know who to approach in lending departments.
There are a number of lenders who are willing to go off the beaten track and stretch their basic criteria to include former local authority homes that a good broker will know about.
The types of lenders that are most favourable toward this are Royal Bank of Scotland, Nat West, HSBC, Abbey and Halifax.
Two building societies, Derbyshire and Skipton, are also good organisations to approach.
The good news is that, in the vast majority of cases, these lenders will lend on the normal income multiple structures that they do to normal cases, around 3.75 times single and 3 times joint.
Also, you do not normally need a larger deposit.
Potential problems
However, if you were to walk into a branch of one of these, you may have problems further down the line.
This is because a basic adviser at a bank or building society might go along with the plan, giving it the go-ahead, only to find they have not mentioned crucial issues like how many floors up the flat is and how many homes are private in the block.
Then someone kills the deal at a higher level. This has happened on numerous occasions.
Major refurbishments
The other main consideration when buying this type of property is a statutory notice of intention to carry out work, specifically major refurbishments of the block.
It is not uncommon to see bills upward of £20,000 for work.
One example I recently saw was a guy who bought for £65,000 and, within 5 months, had been asked for £23,000 towards a new roof, new double glazing and concrete repairs.
As a major incentive for buying this type of property is the low cost, being asked to find a further 35% so soon after is a real kick in the teeth.
Therefore, the general state of the building needs to be a major consideration before you buy.