There are a variety of affordable housing property types that occasionally become available on this scheme, including:
Properties are offered for sale on selected sites with a discount off the full market value. For example, a £100,000 house with a 25 percent discount will be offered to qualifying applicants on our scheme for £75,000.
This is not shared equity or shared ownership and even though you have been given a discount, you own the whole property and you do not have to repay the discount. However, there is a restriction on the title which means that when you want to sell the property, you must sell it on to the next person with the same level of discount.
Intermediate rent allows you to rent a property on selected sites at 80 percent of the full market rent. For example, if the full market rent is £500 per month, applicants on the Affordable Housing Scheme will pay £400 per month.
Shared ownership is a part-buy, part-rent scheme. It allows you to buy a share of a property on selected sites and pay a reduced rent to the landlord on the remaining share the landlord owns.
Eligible applicants can usually purchase between 25 and 75 percent of the property, depending upon their financial circumstances. This means that buyers need a smaller mortgage and deposit (minimum of 5 percent) than they would need if they were buying the property outright. They will also have the option to buy more shares as and when they can afford to in future. Monthly costs are usually lower than renting the same home privately.
Some schemes give priority to the following types of applicants:
- people with local connections
- social housing tenants
- serving or former military personnel
- first time buyers.
There are no restrictions on the number of bedrooms you can apply for unless otherwise stated in the allocation policy or criteria of the development.
Shared equity and shared ownership schemes are different. A shared equity scheme means you own the whole property, but that you have a loan on a part of your deposit.
Shared equity works by providing you, the buyer, with an equity loan which will form part of your deposit for a property. Loan amounts may vary from scheme to scheme. You would then take out a mortgage on the remaining part of the property's value and will need a deposit of at least 5 percent. For example:
- the property value is £150,000
- with a 20 percent equity loan of £30,000
- and 5 percent deposit of £7,500
- you'll need a mortgage of £112,500.
An independent financial advisor will assess your finances to make sure that you are eligible and that your re-payments are affordable, based upon your financial circumstances.
You will own the property and there are no rental payments, although some providers may charge interest on the equity loan. Some schemes allow you to repay the loan at any time during the term of the mortgage but, you will have to re-pay the loan in full if you sell the property before the end of the mortgage term. The equity loan will be a second charge on your property, representing a percentage of the value. Therefore, when you pay back the loan, you will pay it back as a percentage of the current market value of your home.
If you're a first time buyer, you might be able buy a home for between 30 and 50 percent less than its market value. This offer is called the first homes scheme and is only available in England. The home can be:
- a new home built by a developer
- a home you buy from someone else who originally bought it as part of the scheme.
The following schemes are managed by the Help to Buy agent or individual housing associations and not the council.
Help to Buy
Help to Buy e-Equity loan is a government scheme for first time buyers and existing homeowners who want to buy a new build house. The purchase price must be no more than £600,000.
Under this scheme, you can borrow 20 percent of the purchase price interest free for the first five years as long as you have at least a 5 percent deposit.
Visit Help to Buy North West for more information, including the eligibility criteria and to apply online.
Rent to Buy
Rent to Buy is effectively a way to 'try before you buy'. It allows you to rent a home at approximately 20 percent below the market rate for up to five years. During that time, you'll have the option to buy all or part of the property under the terms of Shared Ownership. When you get to the end of the time period, you either have to buy part of the property or move out.
Each scheme or property will have its own allocation policy and criteria and you'll need to check the requirements for the specific scheme or property you are interested in for full details. Please note, there is limited availability on this scheme. Visit Help to Buy North West for further details.
Each development has its own allocation policy and eligibility criteria, so it's important that you check this when enquiring about a property you're interested in.