Right to Buy Mortgages with Bad Credit: What You Need to Know

An expert guide from Mortgage321 – specialists in complex and non-conforming mortgage solutions.

For many tenants, the Right to Buy scheme offers a once-in-a-lifetime opportunity to purchase their council home at a significant discount. But when a client has bad credit—such as defaults, CCJs, arrears, or missed payments—the first concern is often the same:

“Can I still get a mortgage?”

The good news is yes, in many cases you can. And this is exactly where specialist guidance makes the difference.

Can You Get a Right to Buy Mortgage with Bad Credit?

Mainstream lenders tend to avoid applications involving adverse credit, especially where affordability is tight or income is complex. However, a range of specialist lenders actively support Right to Buy borrowers with past credit issues.

Your discount often acts as your deposit, meaning you may be able to buy with little or no savings—a major advantage when credit history is less than perfect.

At Mortgage321, we regularly help clients who have:

• • Defaults (satisfied or unsatisfied)
    
  • CCJs
    
  • Late or missed payments
    
  • Debt management plans
    
  • Low credit scores
    
  • Payday loan history
    
  • Limited or non-standard income
    
  • Self-employment or director-level structures
    

With over 30 years of experience in non-conforming lending, we know which lenders take a flexible, common-sense approach.

How Your Right to Buy Discount Helps You

Your council or housing association provides a discount based on how long you’ve been a tenant. This discount can be used as your deposit.

For example:

• Property value: £200,000
  
• Right to Buy discount: £80,000
  
• Mortgage required: £120,000
  

Even with bad credit, this lower loan amount means more lenders are willing to consider your application.

For some borrowers with heavy adverse credit, the discount effectively reduces risk for the lender—allowing you to access mortgage options that otherwise wouldn’t be available.

What Lenders Look At

Even with past credit issues, lenders focus on:

1. Stability of income
Whether employed, self-employed, or a company director, lenders want to see income consistency. Complex income is welcome—we deal with it daily.

2. Affordability
Most lenders will assess your income against household bills, debts, and spending. Right to Buy mortgages typically allow more generous affordability than standard purchases.

3. How recent the credit issues are
Older than 3 years? Many lenders are relaxed.
Within the last 12 months? Options still exist, but at specialist rates.
Active DMP or recent arrears? Still potentially acceptable with the right lender.

4. Your credit file
We always recommend downloading your Checkmyfile report so we can see all three UK credit agencies in one place. This allows us to assess your situation accurately from day one.

How Mortgage321 Helps You Move Forward

Right to Buy with bad credit requires a broker who understands specialist lenders, underwriting logic, and how to present your case clearly.

Here’s how we support you:

✔ Full credit review
We analyse your full credit profile and match you with lenders who accept your specific type of adverse credit.

✔ Affordable lending options
We identify lenders offering competitive fixed rates—even for clients with complex or damaged credit histories.

✔ Tailored mortgage strategy
We guide you step-by-step, including budgeting, income assessment, and preparing your application correctly the first time.

✔ Fast, thorough communication
We coordinate everything with the lender, your solicitor, and the local authority to keep the process smooth from start to finish.

✔ Long-term planning
We help you understand how to improve your credit so future product transfers and remortgages are easier and cheaper.

Common Questions About Right to Buy with Bad Credit

Can I apply even if I’ve been declined before?
Absolutely—many clients come to us after high-street lenders said no. Specialist lenders often have completely different criteria.

Do I need a deposit?
Usually no—your Right to Buy discount normally acts as the deposit.

Will my interest rate be higher?
If you have recent adverse credit, the initial rate may be slightly higher. Many clients then refinance to a lower rate once their credit improves.

Can I buy jointly with family members?
Yes—joint applications can improve affordability, and some lenders accept family members even if they don’t live with you.

 
Why Choose Mortgage321 for Right to Buy?

Mortgage321 has been serving clients since 2009 and brings over 30 years of specialist mortgage expertise.

Right to Buy with adverse credit is one of the areas where our experience makes a real difference—we understand the lenders, the process, and how to structure applications for a successful outcome.

Our entire approach is built around being:

• Clear
  
• Professional
  
• Client-focused
  
• Solution-driven
  

If you’re considering Right to Buy and have concerns about your credit file, we are here to guide you every step of the way.

Thinking About Buying Your Council Home?

Speak to our team today for straightforward, specialist advice. Call 01255 440142 or email [email protected] 

Mortgage321 – Your partner in complex and non-conforming mortgage solutions.
Helping you secure the home you’ve built your life in.