Ownership options
Do you want to get on the property ladder? It may be more affordable than you think . The Government offers five different products under a scheme called HomeBuy.
Each product is designed to help people including social housing tenants, key workers and first-time buyers to buy a share of a home and get onto the housing ladder.
Below, we explain how these five HomeBuy products work. Please note that you will usually need to live or work in the area to buy a home developed for low-cost home ownership. to find out more about any scheme, contact our Home ownership team.
1. New Build HomeBuy
This used to be known as shared ownership, and allows you to you buy part of your home (usually 25-40 %) with a mortgage and pay a subsidised affordable rent to a housing association on the remaining part. Later, you can buy further shares until you own your home outright.
As an owner you pay service charges and you are responsible for your own repairs. You would also contribute your share towards any major repairs to the building.
As well as brand-new homes, you may be able to buy a previously developed shared ownership home from its current owner.
This is the most popular method of affordable home ownership - for more details please read the section on NewBuild HomeBuy.
2. Open Market HomeBuy
This product allows you to take out a conventional mortgage to fund part of your property purchase and a low-interest equity loan to cover the rest.
3. Social HomeBuy
If you are an existing tenant of Octavia Housing or any other housing association, or you are a local authority tenant, you may be able to buy from 25% of your current home at a discount (of up to £16,000) and pay a subsidised rent to a housing association or local authority on the remaining part.
Octavia Housing have been approved to take part in the scheme but we only offer it to tenants in homes that have two-bedrooms or fewer as larger homes for rent are in such short supply.
You will need a mortgage to buy a share of at least 25% of the value of your home, after the discount is taken into account. As well as your mortgage payments, you will also pay us a subsidised rent on the share of the property we still own. Later, if you want to, you can gradually buy further shares until you own your home outright, but you will not be eligible for any further discount.
As a home owner you pay service charges and you are responsible for your own repairs. You would also need to contribute your share towards any major repairs to the building.
You would have the right to sell your home at any time. However, if you did this within five years, you would have to repay some or all of the discount, calculated as a percentage of your home’s current value.
As with the right to buy and right to acquire schemes, you will need to meet the legal and other costs associated with buying a home. As a guide, we advise that you should have access to around £4,000.
4. HomeBuy Direct
HomeBuy direct allows you to buy a selected NewBuild HomeBuy property (see above) with the assistance of an equity loan.
Under this scheme, if you are a first time buyer with a household income of less than £60,000, you are entitled to buy a percentage of a new home from a development partner. You will need to take out a mortgage to cover at least 70% of the purchase price, this is then topped up with an equity loan covering up to 30 per cent of the price. The maximum value of homes purchased through HomeBuy Direct is £300,000.
The equity loan is co-funded by the Homes and Communities Agency (HCA) and the development partner.
When you sell your home, the amount you have to repay on the original contribution, which was funded by the Governement, woudl be calculated on teh increased value of the property. So if the loan you received covered 30% of the cost of your home, you would repay 30% of the total value at the time when it is sold.
5. My Choice HomeBuy or Ownhome
My Choice HomeBuy or Ownhome allows you to find your own home on the open market. You will need to raise 75% of the purchase price by getting a mortgage from one of the four mortgage lenders taking part in the scheme.
The lender will give you an extra equity loan to cover 12.5% of the purchase price, which will be interest free for five years. The balance will come from an equity loan from Housing Options with no monthly repayments.
If you decide to sell your home, you will need to repay both equity loans as a percentage of the current value of the property.
Who do I contact?
For any information about the shared ownership properties featured above, you can call 020 8354 5611 or email sharedownership@octaviahousing.org.uk.
To find out about other schemes running in your area, you need to contact your local HomeBuy agent
If you live in London, go to www.housingoptions.co.uk, or phone 020 8920 7777 (if you live north of the Thames) or 020 8294 5000 (if you live south of the Thames).
Other schemes
Housing association and local authority tenants also have access to the following schemes for buying the home they live in:
- Right to Aquire - for some housing association tenants who meet the required criteria, who are interested in buying their existing homes at a discount.
- Right to Buy or Preserved Right to Buy – this a shceme that is very similar to 'Right to Aquire' (above) but for local authority tenants or tenants who have been transferred from a local authority to a housing association.
If you would like further information or to see if you are eligible for either of these scemes, please contact us.
