Home ownership and discount market housing

Applicants can apply for a property which has one room more than they need, for example; a single person or a couple can apply for a two bedroom property.

If more than one applicant is applying for a property (even if they are not married, long term partners or carers), both names must be on the mortgage to ensure that they remain committed to their purchase and do not under occupy a property on the scheme. For example, two friends or a brother and sister applying to live together in the same property.

Priority for the allocation of accommodation will be given to an applicant where a Compulsory Purchase Order has been served on their current home, provided the property is situated within the borough. The applicant will be required to provide proof of the order.

Further considerations are as follows:

• two people requiring re-housing as individuals (not as a couple) for a 2 bedroom property would take priority over 1 individual or a couple with no dependents
• one bedroom will be allocated to children of the same sex, with a maximum of two per room
• one bedroom will be allocated to children of the opposite sex up to the age of 10 years old, with a maximum of two per room
• an additional bedroom will be allocated to an applicant who is over 20 weeks pregnant and will be required to provide a copy of the Maternity Certificate (Mat B1) to confirm the pregnancy

Where applicants cannot be separated by the methods outlined above, priority will be given to the applicant who registered first on the Affordable Housing Scheme.

Where demand for a property is low and the council risk losing their nomination rights, the property, regardless of size or type, may be offered to any applicant on the Affordable Housing Scheme, subject to a financial assessment.

You must be able to secure a mortgage to buy a property. For this purpose, you will need to appoint an independent financial advisor to assess your finances to make sure that you are eligible and that your mortgage requirements are affordable, based on your financial circumstances. You must be able to afford to buy the property at the discounted price but not at the full market value.

The assessment will take into account household income, savings, equity from the sale of an existing property and the amount of mortgage a bank or building society will agree to lend you. Most house builders will be able to help you locate an independent financial advisor who has a full understanding of this scheme and s106 affordable housing. It is useful to know that some financial advisors charge a fee for their services and will advise you of any potential costs at the outset.

In order to confirm your eligibility, your independent financial advisor will multiply your gross annual income:

• by 4 if you are a single applicant
• by 3.5 if you are making a joint application.

The council cannot allow you to borrow more than this, even if a bank or building society is prepared to lend you more. As long as this figure plus any savings, equity from the sale of an existing property etc is less than the full market value of the property you will be eligible, for example:

• property price (full market value before the discount): £160,000
• property price (after a 25 percent discount): £120,000
• single applicant gross annual income: £40,000 per annum multiplied by 4 equals £160,000
• joint applicants gross annual income: £40,000 per annum multiplied by 3.5 equals £140,000
• savings of £19,000, to total £159,000: applicants are eligible as this figure is less than the full market value before the discount is applied.

You will need a deposit of at least 5 percent of the purchase price. Your independent financial advisor will be able to tell you exactly how much deposit you need. You'll also need to fund all other purchase costs, including solicitor fees and stamp duty if applicable.

You should ensure that you budget for regular outgoings including household bills and buildings insurance. In addition, some apartments and houses may have service and/or management charges. You should discuss all associated costs and ongoing charges with the sales team at each development and/or a solicitor before you agree to buy.

Upon completion of your purchase, you must pay the council an administration fee of 1 percent of the discounted market value of the property, as a contribution towards the costs associated with the nomination process as this scheme is not Government funded.

It is important that you keep up with your mortgage payments as your home may be at risk of repossession if you fall into arrears.

No. You must live in the property throughout your ownership.

This is a long term scheme as, on subsequent sales, you as the owner must to sell to prospective buyers, nominated by the council, the same level of discount that you received when purchasing the property.

You can sell your property at any time, but you must notify us of your intention to sell.

Property valuations

You will need to get three written valuations that are less than one month old from reputable local estate agents and send them to us, together with a copy of a valid Energy Performance Certificate.

The valuations will be assessed, together with records of recent sales of similar properties in the locality. This will establish the open market value of the property. In the event of a dispute, the open market value will be decided by an independent surveyor whose decision will be final. Please note that there may be a cost associated with this process.

Re-sale process

Once the value has been agreed, your property will be advertised for sale on our Affordable Housing webpage for a minimum period of 10 weeks. This can vary depending upon the legal agreement or Section 106 attached to each development.

At the market value less the level of discount obtained through the original sale. The property will be offered to the qualifying person or qualifying household identified as having the most priority on the Affordable Housing Scheme.

If a buyer has not been found within the timescales, you will be entitled to sell the property on the open market at market value through a reputable estate agent, subject to the restrictions on sale price.

Where you're permitted to sell the property on the open market at market value, you are required to pay the council the proportion of the sale equal to the level of original discount upon completion. You must contact us if you decide to reduce the sale price at any time during marketing, as this could affect the amount that you have to pay the council upon completion. You'll also have to pay for all costs and charges of the council to remove the affordable housing restriction, which is approximately £300 plus a £65 sealing fee. The open market value of the property will be determined by the council.

Please note, the sales process may be different for each scheme. Your solicitor should explain the process to you at the time of purchase.

If you are in negative equity, you will still be required to sell the property at market value and pay the council the proportion of the sale corresponding to the original discount percentage.

Property prices vary according to market conditions and the value of your property may go down as well as up. This could mean that your mortgage exceeds its market value. This is called negative equity, a term commonly used to describe the situation of having a home that is worth less than your mortgage.

Negative equity becomes a problem if you want to sell or are forced to sell your property as you would still owe money on your mortgage.

If you are in negative equity and need to sell your property, contact your mortgage lender as soon as possible and ask if there are any schemes to help with negative equity. Some lenders may be able to help existing borrowers, but this is usually if you have a good payment record. For example, there may be a maximum amount of debt on your old mortgage that can be included in your new mortgage. This is not necessarily a cheap option as the interest rate may be higher and there may be a fee. You are also putting your new home at risk of repossession if you cannot keep up the total mortgage payments on the new home. Payments will be larger than normal because of the shortfall having been included.

The council cannot accept any liability if you find yourself in negative equity after you have purchased a property on this scheme.

If the owner of a property dies, their heirs will be allowed to continue to live in the property, providing that this was their principal or main home at the time of the owner's death. They will be liable under any covenants existing for the original owner. If the property is not the heir's principal or main home, it must be sold in accordance with the procedures outlined above.