Equity release on ex-council properties

How to unlock your ex-council house equity

Page last reviewed: 25th October 2024 ︱Next review date: 25th October 2025

Written in line with our editorial policy.

If you own an ex-council property then you might be looking into how you could unlock some of its value to boost your finances. One option for homeowners who are 55+ is equity release. 

In this article, we explore if you can release equity from an ex-council house or flat and if so, how to go about it. We will be covering:

• What is equity release?
• What is an ex-council property?
• Can you do equity release on an ex-council property?
• How much could I release from my ex-council house?
• Equity release providers and ex-council properties.
• How could equity release benefit me?

We hope this guide will help you understand the issues around ex-council houses and equity release. Our selected advisers are also available to discuss your circumstances and offer further information and advice. Simply call us on 0808 178 3055 or request a call back for a time that suits you, and we’ll arrange an appointment.

Please note: This article is for information purposes only and does not represent financial, mortgage or investment advice. If in doubt, you should seek independent financial advice.

What is equity release?

If you are a homeowner aged 55+ in need of a top up to your finances, then you may be able to use equity release to access some tax-free money from your home’s value.

A lifetime mortgage is the most popular type of equity release plan. This is a secured loan where you continue to own 100% of your home. Exactly how much you can release will depend on factors including your age and property value. 

There are no mandatory monthly repayments with a lifetime mortgage. Instead, the loan plus interest is paid back through the sale of your home when you pass away or move into long-term care. However, you can make voluntary payments towards your plan if you wish to reduce or prevent the interest from building up.

From making your application to receiving your money, equity release timescales are typically around 6-8 weeks. Of course if your situation is more complex, then things may take longer. Your adviser will be able to give you a good idea once you speak to them.

Are you younger than 55 and in need of a cash boost? Read our blog here to explore how to release equity if you are under 55.

What is an ex-council property?

Ex-council properties have given many thousands of homeowners the opportunity to get on the property ladder for a lower price than they might have otherwise been able to achieve.

Originally built as local-authority council homes, these homes have at some point been bought privately. This became possible after the Right to Buy scheme was brought in by the Conservative government in 1980.

Some ex-council properties have had multiple owners since they were first purchased from the council. Others have had the same occupant or family living there since being built. There are many different types of ex-council properties including houses, bungalows, maisonettes and flats.

Many ex-council properties are located in desirable areas, often with well-established communities, green spaces and convenient access to local amenities. 

An article on the home design website homify.co.uk discusses the benefits of owning an ex-council property. It says: “Let’s not forget that an ex-council house will usually be of a good-build quality… as local authorities had no interest in ongoing maintenance costs, plus, they were designed to comfortably and safely house families, so they are usually surprisingly spacious!”

It’s easy to see why some residents, especially those who’ve lived in these homes for years, may prefer to stay in place rather than move elsewhere when they need to release equity. This may make an option like a lifetime mortgage appealing to you, as it might allow you to unlock property wealth without the need to relocate.

Can you do equity release on an ex-council property?

Customers may be wondering “can I get equity release on an ex council house” and the answer is yes, many of the big name lenders do consider equity release applications on ex-council properties. However, there tends to be a few caveats to what they will approve. Further on in this guide you can see specific examples of what different providers will consider.

One key difference for owners of ex-council or ex-housing association properties is that some lenders raise the minimum property value for equity release from £70,000 to £100,000 or sometimes even higher to be eligible. However, given the boom to property prices over the last decade, this isn’t typically an issue in many parts of the UK.

If you bought your ex-council property and were given a Right to Buy discount, then most lenders will not offer equity release until five years after the purchase. Alternatively, you may be able to pay back some or all of your discount if you arrange your plan within the five-year period. 

Some equity release providers will not arrange a plan on an ex-council flat. In addition, if your ex-council home is leasehold, some equity release providers might require you to purchase the freehold if you wish to arrange a plan. You may be able to use some of the money you unlock with equity release to do this. 

If you bought your home through the Right to Buy scheme, read our guide “Can I release equity from my Right to Buy house?”

How much could I release from my ex-council house?

The amount you could unlock from your ex-council house depends on a number of factors including your age and the value of your property. Generally, the older you are and the higher your home’s value, the more you can typically unlock. 

Our free equity release calculator is a handy way to estimate how much you could access.

Even with the property market currently seeing a fall in prices, if you bought your home ten or more years ago then it may be worth considerably more now. This means the amount you could unlock may be more, too. 

A quick way to find out how much your home is currently worth is to search property selling websites such as RightMove and Zoopla for similar properties in your area. 

Read more: How much equity can I release from my home?

Equity release providers and ex-council properties

There are a number of equity release providers, each with their own criteria and requirements concerning ex-council properties.

Here are some of the equity release providers who you might be able to arrange a plan with by coming through Equity Release Wise:

• Aviva considers ex-council properties and homes bought under any Right to Buy scheme. That isn’t to say they accept all ex-council homes, but your adviser may be able to make an application depending on your circumstances. Aviva accepts leasehold properties depending on how many years are left on the lease.
  
• Just accept ex-local authority houses worth £100,000 or more that are in a good state of repair. You must fully own and occupy your property. Leasehold properties must have a minimum of 120 years remaining on the lease.
• Canada Life will consider your application if your home is an ex-council or housing association property on select developments. They will not approve equity release on an ex-council flat or maisonette, or properties bought through the Right to Buy scheme that are still in the exemption period.
• Pure Retirement will consider ex-public sector houses, bungalows and maisonettes providing they are worth £100,000 or more. If your property is leasehold, it must have a minimum of 120 years remaining on the lease. They will not approve equity release on ex-council flats.
• More2life will consider ex-local authority houses or bungalows worth £150,000 or more. It says they must be of traditional construction and built post 1940. They must also be in an area which is predominantly in private ownership, which must be equal to or greater than 40% and subject to satisfactory valuer’s comments.
• Crown Equity Release offers home reversion plans. This is an alternative to a lifetime mortgage and it’s where you sell all or some of your home to a reversion company. If you have owned your home for less than ten years after exercising your Right to Buy, you must first offer your home to your previous landlord or another social landlord in your area. You are then free to sell your home to anyone if the landlord does not agree to buy it within eight weeks. 

Find out more about equity release

If you are a homeowner wondering “can I get equity release on an ex council house” then why not ask a specialist? Our selected advisers are here to answer all your questions and help you explore the option of equity release on your ex-council property. For peace of mind, all the information, quotes and initial advice you receive is free of charge. 

This means it needn’t cost a penny to find out if you are eligible and how much you could unlock. Only if you decide to go ahead with a plan will you receive a fee for advice, which you can pay from the money you unlock.

In addition, you will only ever be recommended a plan from a member of the Equity Release Council to ensure you receive all the protections and safeguards they offer. This is to safeguard you from any equity release horror stories in the future. 

Talk to our friendly selected advisers on 0808 178 3055, or request a call back for a time that suits you. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could release.

About Clare Yates. With over a decade’s experience writing about later life financial planning, Clare offers a wealth of knowledge about equity release, pension annuities, wills, LPAs and more. When she isn’t writing, Clare likes to spend her time baking and going on walks with her husband, two children and their rescue dog. Follow Clare on LinkedIn