In this brief guide, we are going to discuss the question “if I give up my council house do I get money”

If I give up my council house do I get money?

Yes, you could get money if you give up your council house(secure tenancy) or your housing association house to buy a house on the open market. This is known as the cash incentive scheme. To be able to get any money you must agree to give up your council house or flat which you rent from a council or a housing association. These cash incentive schemes may be named differently by each council or housing association. Older buyers are also given priority for these cash incentive schemes.

The council will give you money if you move onto a privately rented accommodation or buy a house on the open market.

You may be wondering why the council offers you an amount of money to give up your council house, the answer is quite simple. The council are offering you this money to give up your council house because it will cost them the same amount over a year or over 2 years if you remain in the council house.

The money the council gives you to give up your council house could be used as a mortgage deposit and could be very helpful to allow you to buy a new home.

You should be aware that due to the popularity of cash incentive schemes you may have to get on a waiting list as soon as possible as the grant money allocated for the scheme may have already been spent by your landlord on other tenants.

Homes you can buy with the cash incentive scheme

You will typically be able to buy most homes or flats on the open market regardless of leasehold or freehold.

You may also be able to use the cash incentive scheme in line with a shared ownership scheme but you won’t be able to use it with a right to buy scheme or a right to acquire scheme.

You will usually not be able to use the scheme to buy:

A mobile home

A houseboat

A home in bad condition

A leasehold home with little time left on the lease

How much can you get if you give up your council house?

As mentioned above you can get some money if you give up your council or housing association house or flat and move to one on the open market.

The amount of money you can get from your council house will depend on where you want o move to and the size of the property you are giving up. The bigger the property, the bigger the cash incentive.

Some cash incentive schemes will offer you between £20,000 to £50,000 but you can get as much as £80,000 to help you buy an open market home.  The schemes will also offer you some money towards your rent if you intend on renting an open market home.

The amount you can get in rent will depend on the factors above too.

Once you have completed the purchase of a home or before completion your landlord will arrange for the cash incentive funds to be paid to your solicitor.

In most cases, the money is paid after you have completed the purchase of your home which means you can’t use it towards your mortgage deposit and the mortgage lender may not consider it when giving you a mortgage offer.

Your landlord will also set a few criteria on when the money will be paid and will only usually pay the money if:

The home you were previously occupying was left in a suitable condition

There is no one still, occupying the home you previously occupied.

How do the council house cash incentive schemes work?

A council house or housing association cash incentive scheme is when your landlord offers you money to give up your council house or flat and rent or buy an open market house or flat.

The money your landlord offers you is intended to help you buy an open market house or flat or rent an open market house or flat

In order for you to get any money from the cash incentive scheme being run by your landlord, you will need to agree to give up your council or housing association house or flat. 

As mentioned prior, these cash incentive schemes which are run by councils or housing associations may have different names such as:

Home purchase schemes

Cash incentive schemes

Home purchase grants

Cash incentive grants

An important thing to note is that some of these schemes will offer the cash incentive as a loan which you will be required to pay back when you sell the open market home you are buying. 

This means a charge will be registered by the council or housing association on the home you are buying.  

This may limit your ability to get a remortgage or ability to qualify for any other government schemes such as:

  • Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
  • Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
  • Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
  • Shared ownership- You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
  • Armed forces help to buy- similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
  • Rent to buy- This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
  • Right to buy- allows you to buy your home at a discount price.
  • Preserved right to buy- same as above.
  • Right to acquire- same as above.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

Eligibility for the cash incentive schemes run by councils or housing associations

The cash incentive schemes being run by councils and housing associations are not accessible by everyone. You will need to make an application and then be deemed suitable fora cash incentive scheme. This means there is no guarantee you will get money for giving up your council home. If you do not qualify or if you are rejected for a cash incentive scheme then you may want to consider the government schemes listed above. 

You may also want to consider if the government schemes listed above are more suitable for you based on your eligibility and their structure.

You are more likely to be accepted for a cash incentive scheme to give up your council or housing association flat or house if you are elderly or if you are downsizing to a much smaller home and hence giving up a home which is too big for you.

The cash incentive schemes run by most councils and housing associations typically have the below eligibility requirements:

You will need to have no rent arrears

You must not owe any council tax

You must not already own a property

You will also usually need to be unable to buy a home or rent a home without the cash incentive scheme

You must be able to afford the monthly mortgage repayments and be able to put down a mortgage deposit on the house you want to buy. Although some consideration will be given if the cash incentive you are being offered or likely to be offered will help you cover a mortgage deposit.

You must not have been overpaid housing benefit

You must be a secure council house tenant or an assured housing association tenant

Steps to apply for a cash incentive scheme

To apply fora cash incentive scheme which will give you money if you give up your council house or housing association house or flat you should first contact your landlord and inquire if they run such a scheme. If they do, you should then ask them if there is a waiting list and how you can get on it.

You should finally request their eligibility requirements from them or simply ask them if you are eligible and then ask for an application form. Your landlord may be able to offer you help in filling the form or you can contact the citizen’s advice bureau.

You can also check your council or housing association website for details of such a scheme.

The cash incentive scheme will likely be available in an area where there are lots of demand for council housing.

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Independent financial advice

When looking at buying a home you may want to get independent financial advice.

You may want to consider using an independent mortgage broker to get a mortgage.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases. This could be over 11,000 mortgage products. This may have some advantages than going directly to a mortgage lender.

A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your remortgage is indeed a possibility before you make a full mortgage application. Once you have found a home you want to buy or are satisfied with the mortgage offer for your remortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer. 

Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it, they will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

Aside from the cash incentive schemes, there are other schemes out there which allow you to move from a council home to open market home. They may offer you smaller grants and even help you with moving costs.

In this brief guide, we discussed the question “ if I give up my council house do I get money “. If you have any questions or comments about this guide please let us know.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.


John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.