Affordable Housing scheme terms and conditions

Home Ownership / Discount Market Housing

Who can apply?

You do not have to be a first time buyer or on the Council's Housing Waiting List to apply for Home Ownership/Discount Market Housing. Anyone can apply providing they meet the basic occupancy criteria. They must:

  • Register on the Affordable Housing Scheme by completing the online form: Apply for Affordable Housing.
  • Have been resident within the borough (e.g. Prestwich, Whitefield, Bury, Radcliffe, Tottington or Ramsbottom) for at least the last 6 months or more prior to application. If you are making a joint application, only one of the applicants has to be living within the borough.
  • Have no current or former rent arrears or history of anti-social behaviour with the Council.
  • Use the property as their own/main home throughout ownership - it cannot be rented out.
  • Not own any other property. If you currently own another property, you will have to be in the process of selling it before you can buy, part buy or rent a property on this scheme.
  • Be able to afford to buy the property at the discounted price but not at the full market (subject to a financial assessment).

What size of property can I buy and who has priority?

Applicants can apply for a property which has one room more than they need e.g. 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 (e.g. 2 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 (i.e. not as a couple) for  a 2 bedroom property would take priority over 1 individual or a couple with no dependents applying for a 2 bedroom property at the same time.
  • One bedroom will be allocated to children of the same sex (maximum of 2 per room).
  • One bedroom will be allocated to children of the opposite sex up to the age of 10 years old (maximum of 2 per room).
  • An additional bedroom will be allocated to an applicant who is 20 weeks pregnant or more. The applicant will be required to provide a copy of her 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.
  • In cases 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.

Do I need a mortgage?

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 or 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% discount): £120,000.
  • Joint applicants gross annual income: £40,000 per annum x 3.5 = £140,000 (the gross annual income will be multiplied by 4 if it is a single applicant application).
  • Savings: £19,000. Total: £159,000 - the applicants are eligible as this figure is less than the full market value before the discount is applied.

What else do I need to consider?

You will need a deposit of at least 5% of the purchase price - your independent financial advisor will be able to tell you exactly how much deposit you need. In addition, you will 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% 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.

Can I sublet my home?

No - you must live in the property throughout your ownership.

What happens if I want to sell my property?

This is a long term scheme as, on subsequent sales, owners will have to sell to prospective buyers (nominated by the Council) with the same level of discount that they received when purchasing the property.

You can sell your property at any time but you must notify us of your intention to sell. At that time, you will need to get three current written valuations (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 by the Council, together with records of recent sales of similar properties in the locality, in order to 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, there may be a cost associated with this process.

Once the value has been agreed, your property will be advertised for sale on the Affordable Housing Webpages for a minimum period of ten weeks (this will vary depending upon the legal agreement / Section 106 attached to each development - please ask us for details) 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.

Important: Where owners are allowed to sell their property on the open market at market value, they 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). They will also have to pay for all costs and charges of the Council to remove the affordable housing restriction (approximately £300 plus a £65 sealing fee). The open market value of the property will be determined by the Council as above.

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

What happens if I am in negative equity?

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 they run to help with negative equity.  Some lenders may be able to help existing borrowers but usually only 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.

Death of the owner

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.


Shared Ownership

Who can apply?

Shared Ownership schemes may contain certain eligibility criteria from time to time, which could include:

  • Not owning any other property (applications from home owners will be accepted if they can demonstrate that they are in the process of selling their current home).
  • Agreeing to use the property as own/main home throughout ownership, it cannot be rented out.
  • Being registered on the Council's Affordable Housing Scheme.
  • Being in permanent employment.
  • Having a household income of less than £80,000 per year.
  • Having a local connection.

Who has priority?

Some schemes give priority to the following groups:

  • People with local connections.
  • Social housing tenants.
  • Serving or former military personnel.
  • First-time buyers.

Each development will have its own allocation policy/criteria, you will need to check the requirements for the specific scheme or property you are interested in for full details, as and when properties are available.

What size of property can I buy?

There is no restriction on the number of bedrooms you can apply for unless otherwise stated in the allocation policy/criteria.

What percentage of the property can I buy?

Eligible applicants can usually purchase between 25% and 75% of a property initially, depending upon their financial circumstances. An independent financial advisor will assess your finances to make sure that you are eligible and determine what percentage of the property you can afford to buy. 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.

What are the monthly costs?

As well as your general living costs, you will have to pay the following:

  • Your monthly mortgage payments
  • Your monthly rent to the joint owner
  • A service change and management fee for communal or shared services
  • Buildings insurance

Can I buy more shares in the future?

Most schemes allow you the option to buy more shares as and when you can afford to. This is called staircasing. The more shares you own, the less rent you pay. The price you pay for additional shares will be determined by an independent open market valuation carried out by a member of the Royal Institute of Chartered Surveyors (RICS). If you have made improvements to the property (e.g. something that might add value such as an extension providing you had permission from the landlord to build it), the valuation should be based on the market value had the improvement not been undertaken. You will have to pay for the cost of the valuation and your legal fees.

It is important that you check your lease to find out whether there are any restrictions before you apply to buy additional shares. You can get a copy of your lease from Gov.uk - HM Land Registry by applying online at eServices Land Registry.

To find out about buying more shares if you share ownership of your home with Bury Council, please see: Shared ownership - Staircasing process and application.

What happens if I want to sell my share?

First, you must contact your landlord and check your lease to ensure there are no restrictions/conditions relating to the sale of the property. 

You will need to pay for an independent open market valuation carried out by a member of the Royal Institute of Chartered Surveyors (RICS) and send it to your landlord. An estate agent valuation or valuation carried out by a bank or building society for mortgage purposes will not be accepted, as it is not classed as independent. If you have made improvements to the property (e.g. something that might add value such as an extension providing you had permission from the landlord to build it), the valuation should be based on the market value had the improvement not been undertaken.

Re-sale properties will be sold to purchasers who are eligible for shared ownership in accordance with the lease and the provisions set out above.

To find out more about selling your share of a property if you share the ownership of your home with Bury Council, please see: Shared ownership - Re-sale process and application.

Alterations and improvements

You must seek permission in writing from your landlord before carrying out any adaptations, alterations or improvements which could affect the fabric of the building, such as an extension or conservatory.

Who pays for repairs and maintenance?

This is your responsibility, regardless of the share that you own. Some brand new homes are offered with a warranty (defects) period, which should be explained to you at the time of purchase.

Can I have pets?

Your lease will tell you whether you can keep pets and may even specify the type of pets allowed. You must seek permission in writing from your landlord before keeping a pet or pets.  Applications will be assessed on a case by case basis.

Sub-letting

Shared-owners/leaseholders are not permitted to sub-let but they can take in lodgers.

Arrears and breaches

Failure to pay rent, service charge or mortgage payments and other serious breaches of the shared ownership lease including anti-social behaviour could result in forfeiture of the lease or repossession.

Death of an owner

If a shared owner dies, the equity in the property will form part of the deceased's estate and, will be dealt with according to the lease and relevant legislation. If the lease is in joint names, the lease will transfer to the remaining joint owner.


Shared Equity

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. You will need a deposit of at least 5%.

For example:

  • Property value = 150,000;
  • 20% equity loan = £30,000;
  • 5% deposit = £7,500;
  • Mortgage required = £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 (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.

For example:

  • Property value = £200,000;
  • 20% equity loan repayment = £40,000.

Who can apply?

Shared Equity schemes may contain certain eligibility criteria from time to time, which could include:

  • Not owning any other property (applications from home owners may be accepted if they can demonstrate that they are in the process of selling their current home).
  • Agreeing to use the property as own/main home throughout ownership, it cannot be rented out.
  • Being in permanent employment.
  • Having a household income of less than £80,000 per year.
  • Being registered on the Council's Affordable Housing Scheme.
  • Having a local connection.

Each development will have its own allocation policy/criteria, you will need to check the requirements for the specific scheme or property you are interested in for full details, as and when properties are available.


Intermediate Rent

Who can apply?

Applicants must:

  • Register on the Affordable Housing Scheme by completing the online Apply for Affordable Housing.
  • Have been resident within the borough (e.g. Prestwich, Whitefield, Ramsbottom, Radcliffe, Tottington or Bury) for at least the last 6 months or more prior to application. If you are making a joint application, only one of the applicants has to be living within the borough.
  • Not have outstanding rent arrears with the Council or history of anti-social behaviour.
  • Not own any other residential property.
  • Be in permanent employment and have a household income of less than £80,000 per annum. Applicants on temporary contracts may not be accepted.

An independent financial advisor will assess your finances to make sure that you are eligible and that your rent payments are affordable, based upon your financial circumstances.  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.

What size of property can I rent and who has priority?

See Home Ownership/Discount Market Housing above.

Can I use Housing Benefit to pay my rent?

Unfortunately, you are unable to use Housing Benefit to rent a property on this scheme.

Can I sublet?

No - you must live in the property that you are renting.

Further information

Please contact us if you have any questions or require further information.

Requests for a review of any decision should be sent to Head of Service (Strategic Planning and Economic Development), Town Hall, Knowsley Street, Bury BL9 0SW.


Other types of affordable housing

The following schemes are managed by the Help to Buy agent or individual housing associations and not the Council. Therefore, the Council cannot help you with your enquiries, you will need to contact the Help to Buy Agent/individual housing association directly.

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% of the purchase price interest free for the first five years as long as you have at least a 5% deposit. See Help to Buy - North West for more information including the eligibility criteria and online application form.

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% below the market rate for up to five years (exact period of time varies by scheme or property). During that time period, you will have the option to buy the property 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/property will have its own allocation policy/criteria - you will have to check the requirements for the specific scheme/property you are interested in for full details. Please note, there is limited availability on this scheme. See Help to Buy - North West to find out more.

First Homes - (currently under government consultation)

  • First homes are flats and houses built on developments up and down the country. They will be no different from other properties except they will be sold with a discount of at least 30% off the market value.
  • They will be sold to local people who want to stay in the community where they live or work but are struggling to buy a home at market value.
  • They will be prioritised for first time buyers, serving members and veterans of the armed forces and key workers such as nurses, police and teachers.
  • The discount will be passed on to future buyers when First Homes are re-sold so that more people can be helped onto the property ladder.
  • Buyers will purchase First Homes in the usual way and will have access to conventional mortgage products.
  • When owners of First Homes decide to sell, their home will be independently valued. When they sell their home, the discount will be passed on to the new owner.
  • This means that homes will always be sold below market value and local communities will benefit for generations to come.
  • First Homes are for people to live in so you cannot use them as holiday homes or as buy to lets.

More information will follow when it is available.

Contact for Affordable Housing