Newsletter 6
Case Study 2 – Home Ownership Schemes
Whilst not suitable for everybody, Home Ownership Schemes can be of real help to first time buyers looking to move into their first home. I stress the word home here as there is little, in the short term at least, investment element to most people’s buying decisions, as recent house value reductions have reminded people.
This case study looks at a number of initiatives launched by the Government to encourage first time buyers onto the first step of the housing market ladder. These include Shared Ownership, Shared Equity and HomeBuy Direct.
With the stalling of the housing market in recent times, the Government has launched a number of initiatives to encourage first time buyers onto the first step of the housing market ladder. Several of these have been updated in the recent Budget – please see here for more details.
There is now a wide range of different schemes available but in the main these are only available to key workers, first time buyers or council and housing association tenants.
Care needs to be taken in choosing the right scheme for you. Many lenders have not yet signed up to the schemes and as such you may find your choice of funding restricted.
‘HomeBuy’ schemes
You could get help to buy a home through a HomeBuy scheme. They are open to households earning less than £60,000 a year who would otherwise be unable to buy. You may be eligible if you are either a:
- first time buyer
- previous home owner who can't now afford to buy without help (perhaps because you have broken up with your partner)
- housing association or council tenant
- ‘key worker’ (a key public sector worker, like a nurse or teacher)
‘HomeBuy ’options
There are three HomeBuy options:
- ‘Social HomeBuy’ - helps council and housing association tenants buy a share of their home at a discount if their landlord offers the scheme
- 'Open Market HomeBuy' - helps people to buy a property on the open market through an equity loan
- 'New Build HomeBuy' - helps people to buy a share of a newly built property and pay rent on the remainder
If you are a first time buyer, you may be able to take part in the First Time Buyers' Initiative to help you buy a newly built property. However, the scheme is only available on certain housing developments.
Council tenants can also access a number of different schemes, including the Right to Buy scheme which has been ongoing for many years.
Of course, due consideration should be given before entering one of these schemes. Long-term affordability, including and ‘Government’ payments die must be considered.
At Independent James we can assist you with this and choose the right lender for your circumstances.
http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/HomeBuyingSchemes/index.htm The official Government website on such schemes
Please do Contact Us to obtain further information and a personal illustration.