Home Ownership & Shared Ownership
Open Market HomeBuy
Aimed at key workers, participating lenders will offer a regular mortgage combined with an equity loan of 12.5%, alongside a Government equity loan of up to 12.5%, which will be provided via HomeBuy Agents.
This scheme is primarily for key workers in the East, London and the South East, but will be available on a more limited scale to social tenants and other priority first time buyers.
No charge or interest is levied on either of the equity loans for the first five years.
After five years you could be charged a maximum of 3% interest on the lender’s equity loan, rising up to – but not exceeding - the lender’s standard variable rate after 10 years. You will never be charged interest, or need to make monthly payments on the HomeBuy Agent’s equity loan.
You will be required to repay the lender’s equity loan upon payment of the final instalment of your mortgage, and you will have to repay both the Lender’s and the HomeBuy agent’s equity loans upon sale of your home.
If you qualify for the scheme because you are a key worker, you will have to repay the HomeBuy Agent’s equity loan within two years and – possibly the lenders too - if you leave qualifying employment.
When you repay the equity loans, you will have to share any increase in the property’s value with the Lender and the HomeBuy Agent.Flexishare - Home Ownership Plan
Flexishare - A new breed of mortgage, specifically designed to increase the buying power of first time buyers, key workers and growing families seeking larger houses. A revolutionary part shared equity loan, part conventional mortgage.
An affordability based mortgage solution that provides 100% ownership to the buyer and is made up of part shared equity and part mortgage. The shared equity part of the loan is fixed on an interest rate of 2.99% for the term of the loan.
Highlights include:
- It is not a job-orientated product – any employee type can apply. Borrowers do not have to be key workers
- The Borrower can vary the share or % of lender participation. This is more flexible than the Government scheme, which is fixed at 25%.
- Defaults & County Court Judgements ignored if satisfied for 2 years or more
- Overpayments allowed
- NO Higher Lending Charge
- 5% deposit required
- Available for purchases in England, Wales, mainland Scotland and Northern Ireland
When you repay the equity loan, you will have to share any increase in the property’s value with the Lender.
Shared Ownership
If you would like to own your own home, but cannot afford to buy on the open market, shared ownership could be for you. (You will have sole occupancy rights - you do not have to share your home with anyone else).
Shared ownership enables you to take your first step into home ownership by buying a 25%, 50% or 75% share of a property provided by your chosen housing association. A monthly rent is then payable to the housing association for the remaining share of the property i.e. you purchase a 50% share and pay rent on the remaining 50%.
Your monthly outgoings will include repayments on any mortgage you have taken out, plus rent on the part of the property retained by the housing association. Later, as you can afford it, you can increase your share until you own the whole property.
You could be eligible if you are currently employed (or you have sufficient other means to finance your mortgage) but cannot afford to buy a suitable property on the open market. Priority is usually given to council or housing association tenants, those on the council waiting list, first-time buyers and those that need to move for social reasons such as overcrowding or to receive support.
If you have a County Court Judgments, or you are in rent arrears, we have some specialist schemes which may be able to help you.
As a shared owner, your home may be at risk if you fail to keep up mortgage and rent repayments.
How the schemes compare?
| Open Market HomeBuy |
Flexishare | Shared Ownership | |
|---|---|---|---|
| Deposit required | None | 5% | None |
| Who takes a stake in the property? | You/Lender/Goverment | You/Lender | You/Lender/Housing Association |
| Minimum mortgage amount | 75% of property value | 60% of property value | 50% of property value |
| Can the other parties be bought out | Yes | Yes | Yes |
| Transaction type | Purchase only | Purchase or remortgage | Purchase only |
| Applicant Type | Key Workers only | Key Workers, Growing Families and First Time Buyers | Applicants approved by Housing Association |
| Property Type | Any approved by scheme | Any approved by lender | Any approved by Housing Association |
| Poor Credit History | Some may be accepted | Some may be accepted | Accepted |
