Is the mortgage market turbulence getting you down? Have you got a mortgage-related question you need answering? Email in, and we will get one of our experts to reply. Nick Mendes, mortgage technical manager at John Charcol, has given his advice to a reader below. If you have a question for our experts, email us at money@theipaper.com.
Question: I am 58 and hoping to buy my council flat under Right to Buy. The council has valued it at £265,000 and, with my discount, the price comes to £145,000 – which is what I would need to borrow. I earn £34,000 a year from work, plus a small pension of £2,500 and personal independence payment (PIP) of £6,200 and hope to retire at 70. My flat is several floors up in a high-rise block from the 1970s, and a fire risk assessment last year rated it as moderate but flagged that some external wall panels still need specialist assessment. Given the building’s height and this outstanding issue, will I struggle to get a mortgage? Can my discount count as my deposit, and will my pension and PIP count towards what I can borrow at my age?
Answer: There is a lot going on here, but each part is more manageable than it probably feels at first glance.
Start with the discount. Lenders usually treat the gap between the market value and the Right to Buy price as equity, not as cash you need to find yourself.
Your flat has been valued at £265,000, and your discount brings the price down to £145,000. If you borrowed the full £145,000, you would still only be borrowing around 55 per cent of the flat’s value.
That is a comfortable loan-to-value position for a lender, even though you are not putting down a traditional cash deposit.
You will still need money set aside for solicitor fees, any mortgage arrangement fee, and any repairs or costs the council will not cover before completion. But the deposit itself should not be the main sticking point.
The building is the part that needs the most care.
A high-rise block, especially one over 18 metres or around seven storeys, will face close scrutiny around external wall safety. In practice, that may mean an EWS1 form, a PAS 9980 fire risk appraisal, or other written evidence showing what the external wall issue is, whether work is needed and who is responsible for it.
The fact that your fire risk assessment says some external wall panels still need specialist assessment is a live issue. It does not automatically make the flat unmortgageable, but it does mean lenders will want clarity before they lend.
Since January 2023, many lenders have been able to consider flats in affected blocks where remediation is still outstanding, but only where there is solid evidence behind the position. That might include a formal remediation scheme, a developer commitment, or Building Safety Act leaseholder protection evidenced by a Leaseholder Deed of Certificate.
Without that sort of evidence, many mainstream lenders will either decline or wait until the position is clearer.
Not every lender treats ex-local-authority high-rise blocks in the same way, even once the fire safety paperwork is resolved. Some lenders simply do not like this type of construction. Others, including some building societies and more specialist lenders, will take a more practical view if the documentation is strong enough.
On income, your employment income should be the most straightforward part. Pension income can usually be considered too, especially if it is already being paid. PIP is more lender-specific. Some lenders will use all of it, particularly if the award is ongoing and not under imminent review. Others may only use part of it or ignore it altogether.
That does not mean the income will not work. It means the lender choice matters.
On age, a 12-year term to your planned retirement at 70 is realistic with the right lender. Many lenders now lend beyond traditional retirement age where affordability can be shown. But they will want to understand how the mortgage remains affordable once you stop working full time.
This is not really one case. It is a Right to Buy purchase, a high-rise ex-local-authority flat, an outstanding external wall question, a mixed-income application and a mortgage running into retirement age all at once.
None of that makes the answer no. But it does mean the lender needs to be chosen around all five facts before you apply, not after.
My practical advice is to get the building paperwork first. Ask the council or managing agent whether an EWS1 form or PAS 9980 appraisal exists, whether the specialist assessment has been instructed, whether any remedial works are planned or funded, and whether any leaseholder protection documents are available.
A broker can then take that information to lenders before applying. That is far better than paying for a valuation and hoping the underwriter accepts it later, because a short delay now is much easier to manage than a decline after the wrong lender has already been approached.
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