Low cost home ownership is a form of housing for people who would rather buy a home of their own than rent, but who are unable to afford the full purchase price of a suitable property on the open market.
New Build Homebuy (formally known as Shared Ownership)
This scheme is sometimes referred to as part buy/part rent. The Council works in partnership with a housing association to provide small housing schemes which are offered to New Build Homebuy purchasers. You need to take out a mortgage for a share (usually 50%) of the full price of the property and then pay rent to the housing association to cover the remaining share. You will be able to buy additional shares in the property in the future.This process is called ‘staircasing’
How does it work?
http://www.housingcorp.gov.uk/yourhome/shared.htm
Open Market Homebuy (Formally Homebuy)
In the case of Homebuy, money is usually available each April. We will consider nominating you to a housing association if you are in one of the 3 priority groups and you are unable to buy your own home without the help of the interest free loan. The housing association will help you work out if you can afford to buy and give you help to find a suitable property.
The Homebuy scheme helps you to buy a property in the private sector. If you qualify, you will be entitled to an interest free loan of 25% of the price of a property. A housing association will provide the loan and will take a legal interest in the property. You will have to fund the remaining 75% of the purchase price through a conventional mortgage or savings,
Does the Homebuy loan have to be repaid?
The 25% loan only becomes repayable if the property is sold at a later date. It will be assessed at 25% of the market value of the property at the time that you sell it. If you wish you can repay the loan at any time after you buy the property. The amount repayable
will depend upon the current market value.
Homebuy Resales (Formally Shared Ownership resales).
Occasionally properties in shared ownership schemes become available for sale. Each housing association has its own policy on dealing with resales. You can obtain information on Homebuy resales by contacting the associations direct. The Council does not have control over Homebuy resales.
Can I afford it?
You will need to think carefully about costs before you decide whether you can afford to buy through one of these low cost home ownership schemes. The housing association will help you work out how much you can afford to pay for a property and whether the scheme is suitable for you.
Raising a mortgage
You will have to find the difference between the price of the property and the amount which will be covered by the loan or the Homebuy rent. For this you will probably need to raise a mortgage. The loan will be based on your income - a partner’s income can also be taken into account. Use this link to estimate how much you can afford to spend on mortgage repayments.
Other costs
There will be other costs before you move in including valuation and surveyors’ reports, and legal fees. The housing association will give you more information.
Regular payments
In the case of Homebuy you will pay a monthly rent, as well as mortgage repayments. If you buy under Homebuy will not have to pay any rent.
Other regular outgoings
Other regular outgoings will include Council tax, building and contents insurance and regular bills for services such as gas, electricity and water.
If you are buying a leasehold property you will pay ground rent and if it is a flat or maisonette, you will probably have to pay a service charge. This can include the cost of communal cleaning, gardening, day to day communal repairs, etc.
Schemes vary between organisations so it is better to talk to them directly to find out the latest requirements to be considered.
How to Apply for Affordable Housing
