OP, don't give up your tenancy. I also live in social housing and the security you have is priceless, compared to being at the mercy of a private LL.
Re. decorating: I have had 3 council properties so far and on moving in the housing officer surveyed it with me and depending on the state of it I was given B&Q vouchers. Did you not get anything like this to deal with decoration?
Re. the noise and dogs barking: if you'll work in healthcare and do shifts, you'll need to learn to sleep during the day in all kinds of noise, too. What'll happen if you move into private rental and 2 weeks later a major construction project will start for the next 3 years? Also, what if you get noisy neighbours - then all (most of) your neighbours will be owners by default and there will be no way they'll go either, just like now. You can, of course, keep moving, but there is no guarantee that wherever you move to won't be the same 2 weeks later... And you'll have lost the security of social housing.
As for finances: I earn above 20K and at one point I earned 37K while still living in social housing in an area of the country where I could have easily afforded a mortgage. But believe me, 20K will not go that far, you'll have to pay more rent to a private LL and you'll have less disposable income (from which you'll also have to save, if you are responsible, because a private LL can give notice and then you'll need money for a deposit...).
I would not give up social housing, OP.