h&f Home Buy Products
There are a number of products which may be available to you.
New Build Homebuy
(Part-buy part-rent, previously called shared ownership) Enables residents and workers of the Borough to buy a share of a newly built property
- You buy between 25%-75% of a home and rent the remaining share,
- Over time you can buy more shares in the property (a process known as staircasing) and in doing reduce the amount of rent you pay,
- You can keep buying shares in the property until you own the property outright. Once this happens you stop paying rent,
- If at anytime you wish to sell the property you keep the percentage of the property’s current market value that you own.
OwnHome
This is a new scheme which was recently introduced alongside MyChoiceHomebuy to replace the Open Market Homebuy scheme. This scheme allows you to raise an equity loan to equal up to 40% of the value of a property in the open market. This scheme is funded by Places for People and is in co-operation with the Co-operative Bank. You will pay nothing for the first five years on the equity loan. After these five years a low rate would be paid on the sum – starting at a fixed rate of 1.75% interest per year for the next five years, and then increasing to 3.75% interest per year from year eleven. The remainder would be funded through a conventional mortgage with The Co-operative Bank. There will be no extra charges or premiums on top of the mortgage and a range of competitive deals including fixed rate and tracker options are on offer. In some cases, people’s circumstances change and their financial situation could be adversely affected. There is hope however, as you are entitled to trade in all, or part of, your equity loan any time after one year of owning the property. If you decide to sell, it will be at a price based on the current market valuation of your home.
MyChoiceHomebuy
Tthis scheme was also launched as part replacement for Open Market Homebuy and offers a similar equity loan model.
Through MychoiceHomebuy you can apply for a mortgage with any lender you choose. The scheme will provide you with up to 50% of the value of your chosen property as an equity loan. The remainder will be funded through a conventional mortgage with any Financial Services Authority regulated mortgage lender. There is a small monthly charge of 1.5% per annum on the loan.
The loan is only redeemed in full when the property is sold. The H&F Home Buy team can provide you with a list of independent financial advisors for expert guidance on mortgages, the equity loan and repayment criteria.
Right to buy
This is for council tenants who wish to buy their council property outright receiving a £16,000 discount on the total value of the property.
To be eligible, you must have been a tenant for 5 years if your tenancy began after 18 January 2005 or for two years if you were a tenant before that date. Some properties are excluded, including those related to your employment and some housing provided specifically for older people or those with disabilities.
Social Homebuy
Social homebuy is a scheme that enables council tenants to buy their council home on a part buy-part rent basis, receiving a discount on the initial purchase price. It does not exclude the tenant from looking at any other products available.
- You may buy between 25%-75% of your current property and continue to rent the remaining share from your landlord, (The share purchased minimum of 25%) is dependant on financial circumstances with rental of up to 3% payable to the landlord on the remainder.
- Over time you can buy more shares in the property (a process known as staircasing) and in doing reduce the amount of rent you pay.
- You can keep buying shares in the property until you own the property outright. Once this happens you stop paying rent.
- If at anytime you wish to sell the property you keep the percentage of the property’s current market value that you own.
The discount offered will be in proportion to the share percentage purchased, e.g. on a 25% share you will receive £4000 discount. This is offered on this initial share only; hence we encourage clients to purchase as big a share as possible from the outset.
If the property is sold within the first 5 years of purchase, the discount is repayable to the landlord and the council has first refusal on whether to buy back the property at market value or nominate a purchaser.
Tenant incentive scheme
This scheme offers those council tenants with a 3+ bedroom property, significant financial assistance to purchase a property of their own, either in the borough, or elsewhere in the country or in the tenant's country of origin. This grant is dependent on the size of the accommodation, and will range from around £30,000 to £40,000. This scheme, which runs to March 2008, is available for up to 30 tenants on a on a first come first served basis.
Eligibility
- Secure council tenants occupying 3, 4 or more bedroom properties.
- Must have had a tenancy for 2 years if prior to 2004 or 5 year tenancy after 2004.
- Tenancy must be managed to a satisfactory level (i.e. no rent arrears, breaches of tenancy etc…)
- The property must be in good condition
- The tenant must be able to provide unquestioned vacancy of the property
There are also additional grants which you may be eligible for. These will be discussed with you upon the completion of your application.
First time buyers initiative (FTBI)
Enables aspiring first time buyers, who are unable to buy a home on the open market, to purchase a new property with the help of an affordable mortgage and with Government contribution on a designated FTBI development. This contribution is paid directly to the builder of the development on behalf of the client, which will enable the first time buyer to take out an affordable mortgage (a minimum of 50% of the total purchase price) on which they make repayments.
Through this scheme you can buy a share in a brand new home. You usually pay a mortgage on the part you own but make no repayments on the part you do not own for the first three years. If you sell the property or leave a designated profession, you will be required to repay the same percentage contributed when you purchased the property. E.g. if we contributed 30% when you purchased; you repay 30% of the selling price when you sell.
Right to acquire
Enables housing association tenants to buy their current property outright at a discount
Eligible housing association tenants may have the right to acquire their home at a discount where the property was built or acquired by the Housing Association with public funds since 1 April 1997, or transferred from a local authority to the Housing Association. As with Right-to-Buy, to be eligible you must have been a tenant for 5 years if your tenancy began after 18 January 2001, or for two years if you were a tenant before that date. Some properties are excluded including those related to your employment and some housing provided specifically for older people, or those with disabilities.
For more information about the different products, to register an interest, or to discuss which product would best suit your circumstances, please contact us on 020 8753 6464, via email to h&fhome-buy@lbhf.gov.uk.
