Help to buy
There are a number of government schemes aimed at helping first time buyers and certain existing homeowners to purchase a home.
The types of schemes currently available are:-
- Help to Buy: equity loans: This scheme is available to first-time buyers wishing to buy a new build property with a maximum purchase price of £255,600 (West Midlands). Homebuyers must contribute 80% of the home’s price, for example, with a minimum of 5% deposit and up to 75% mortgage. The government will loan homebuyers the remaining amount, up to 20%.
- Shared ownership: This scheme allows you to buy a share in a home from a housing association (also called a registered provider) and pay a discounted rent on the remainder. If you buy a flat, you will also have to pay a service charge. The share you purchase will normally be funded by a mortgage. You will then pay rent on the share of the property still owned by the housing association. The size of the share purchased can vary between 10% and 75% depending upon income and savings. The larger the share, the less rent you will have to pay and you can buy further shares in your home at a later date (known as 'stair-casing') until you own your home outright. As house prices can go up or down, you may pay more for additional shares or, if you decide to move, you may have to sell at a price less than you originally paid.
You may be eligible to buy a home through Help to Buy: shared ownership in England if:
- you have a household income of less than £80,000 (outside London) or £90,000 (inside London)
- you are a first-time buyer, you used to own a home but can’t afford to buy one now or own an existing shared ownership property but are looking to move.
In Lichfield district, most shared ownership properties are prioritised for people with a local connection to the district who are in housing need. Anyone that fits the local connection criteria would usually get priority over other applicants for the first 3 months of the property becoming available. This only applies to new-build shared ownership homes, not re-sales. The local area connection criteria varies between developments, but generally it’s based on:
- Being a resident (or employed within) the area for a number of years (usually between 2-5).
- Having close family connections with relatives living in the district, such as a parent, grandparent, child, grandchild or adult sibling who has lived in the area for at least three years.
The Help to Buy agent will check if you qualify for local connection. After the first 3 months of the property being available, anyone can apply for shared ownership in the district provided they are eligible.
Shared ownership for certain groups:
- Military personnel: Certain military personnel get priority over other groups in the Forces Help to Buy scheme which is available only in England.
- People with disabilities: Home Ownership for People with Long-Term Disabilities (HOLD) can help you buy any home that’s for sale on a shared ownership basis if you have a long-term disability. You can only apply for HOLD if the properties available through the other home ownership schemes don’t meet your needs, for example, you need a ground-floor property.
- Older people: This is called Older People’s Shared Ownership and is available if you’re aged 55 or over. It is similar to the general shared ownership scheme, but you can only buy up to 75% of your home. Once you own 75% you won’t have to pay rent on the remaining share.
- Rent to Buy: This scheme is designed to help those move from renting to buying a home by providing subsidised rent. It is also known as Rent to Save, Rent to Own or Intermediate Rent. With Rent to Buy in England, Scotland and Northern Ireland, you rent a newly built home at approximately 20% below the market rate for up to five years (exact period of time varies by property). During that time period, you have the option to buy the property or to buy part of the property under a shared ownership scheme. When you get to the end of the time period, you either have to buy part of the property or move out.
The Help to Buy: shared ownership scheme is administered through Help to Buy agents. Find out more information on the scheme including details on the Help to Buy agent in the area you are interested in.