We bought an XLA on an estate.
The idea that "when prices fall XLA will be the first to go..."
Well we didn't buy to make a killing and move up the chain - we bought to have a home where we can be secure.
This thing about them not looking as nice on the outside as the inside - yes, true, ours, in particular, is not so pretty. But we live inside, not outside - if others don't like the outside of our home, well that's their problem.
Not all council housing is the same in atmosphere. I lived in some pretty nice private housing and also in emergency council housing (where you get moved to when you're homeless) as a child.... there were good and bad points about both - it's impossible to generalise (IME).
The main problem with council (leasehold) housing is that the council can decide to, for example, re-roof the block using Dodgy McDodgy Ltd and charge you shit loads. However, it's not like you don't have maintenance issues in leaseholds elsewhere - we came across similar stories with friends and when looking to buy. One might hope that you have more control over it - but that's not necessarily the case.
As for mortgages.. we were turned down on concrete buildings and also on the flats on Brixton Water Lane directly overlooking Mango Landin' (because of the open communal walkways). Our current flat also has open communal walkways, and is nowhere near as aesthetically pleasing, but we're on the ground floor in this instance - which apparently is ok.

Such bollocks it's untrue!!
But we have bought somewhere big enough for us to remain for the forseeable future, backing onto a park (not very common in London) henceforth incredibly peaceful, with really nice neighbours and a good atmosphere. The private flats next to us which sell for a lot of money, struggle to sell and, by all accounts, are not terribly sturdy with rather small rooms. But that's ok because they look nice from the outside.