The Right to Buy scheme helps council tenants in England purchase their rented home at a discount. For many, this is the first step to owning property. But if you have a poor credit history, you may wonder if it’s still possible. The good news is that right to buy mortgages for bad credit are available, though the process can be more challenging.
This guide explains how the scheme works, what lenders look for, and how you can improve your chances of being approved.
What is a Right to Buy mortgage?
A Right to Buy mortgage is a loan that allows eligible council tenants to purchase their home at a reduced price under the government scheme. The discount is usually based on how long you have lived in the property and can make owning a home more affordable.
The mortgage itself works in the same way as a standard loan. You borrow money from a lender, repay it in monthly instalments, and the home becomes your property.
Can I get a Right to Buy mortgage with bad credit?
Having bad credit does not automatically prevent you from getting approved. Lenders will want to know the details of your credit history, such as missed payments, defaults, or more serious issues like IVAs or bankruptcy. Some specialist bad credit mortgage lenders are willing to consider these situations, though they may set stricter terms.
You may also find that approval depends on your income, deposit size, and the level of discount you receive under the scheme. It is often worth speaking to a right to buy mortgage broker who can match your circumstances with lenders more open to bad credit cases.
What is the Right to Buy discount?
The Right to Buy scheme gives tenants a discount on the full market value of their property. This discount varies based on location and how many years you have been a tenant. The longer you have rented, the bigger the discount.
For many applicants with poor credit, this discount is helpful because it reduces the amount you need to borrow. In some cases, the discount itself can count as your deposit, making it easier to move forward without a large upfront payment.
Types of bad credit that can affect your Right to Buy application
Not all credit issues are the same. Some may have a smaller impact on your chances than others. Common examples include:
- Missed or late bill payments
- Defaults on loans or credit cards
- County Court Judgements (CCJs)
- Debt management plans
- More serious issues, such as getting a mortgage after an IVA or bankruptcy
Lenders will consider the type of issue, how long ago it happened, and whether your situation has improved. Understanding your credit score and how lenders view it is the first step before applying.
How lenders assess your application
When you apply for a Right to Buy mortgage, lenders look at more than just your credit record. They will check:
- Income and affordability – Can you cover monthly repayments while managing your other bills?
- Employment history – A steady job or consistent income is a positive sign.
- Deposit – The Right to Buy discount often counts as a deposit, but some lenders may still want extra savings.
- Credit history – Past issues are reviewed carefully. Some lenders are stricter, while others are more open, such as lenders who accept poor credit scores.
Lenders weigh all these points together. This means even with a poor history, if your income is stable and the discount is strong, your chances are better.
How to improve your chances of approval
Applying for a mortgage with bad credit can feel daunting, but there are ways to improve your chances before you apply.
Build your credit profile
Check your credit report carefully to make sure the details are correct. Pay bills on time and avoid taking on new debts. Even small steps, such as setting up direct debits, can help. Knowing how to improve your credit score is useful, too, because lenders often check this when reviewing applications.
Save for a deposit
While the Right to Buy discount often acts as a deposit, having extra savings can strengthen your application. It reduces the amount you need to borrow and shows lenders you are committed.
Show stable income
Proving that you have a steady job or regular income reassures lenders. They want to know you can keep up with payments even if your credit history is poor.
Deal with past credit issues
Some problems, such as getting a mortgage after an IVA, will take time to repair. If your IVA has been settled and you have since shown good financial behaviour, a specialist lender may still consider your application. Tools that focus on understanding your credit score can also help you see what lenders see.
Why use a specialist mortgage broker?
Applying for a mortgage can be overwhelming, especially if you have credit problems. This is where a right to buy mortgage broker can help. A broker understands which lenders are open to bad credit cases and can save you time by pointing you towards the most suitable options.
Some brokers also have direct access to specialist bad credit mortgage lenders who don’t always advertise widely. These lenders may be more willing to consider applicants with issues like CCJs or past defaults. Using a broker gives you the advantage of knowing where your application stands and the best chance. Find a broker here.
Final thoughts
Buying your council home under the right to buy scheme is a big opportunity, even if you’ve had credit difficulties. Options like the right to buy mortgages for bad credit make it possible for many tenants to become homeowners.
The key is preparation. Work on your credit profile, build some savings, and show a stable income. If you’ve faced challenges like getting a mortgage after an IVA, a broker can guide you towards the right lenders.
With the right to buy discounts reducing how much you need to borrow, and support from experienced brokers, many people with less than perfect credit still manage to buy their home. Taking time to plan and seeking the right advice can make all the difference in turning your application into a success.