Frequently Asked Questions
I earn a reasonable salary but I still can’t afford to buy my first home. Is there anything I can do?
Yes! There are lots of shared ownership and shared equity deals available from either the government, through housing associations or from private developers, and they’re all designed to help you get on the housing ladder for less than the cost of a traditional house purchase. The government schemes come under the HomeBuy brand, so look out for the logo when you’re looking at housing developments.
Shared ownership? Isn’t that like a flat share?
No! Shared ownership means you own a share in the property and the housing association owns the rest, and you pay rent to them on the part you don’t own.
Shared ownership? Shared equity? What’s the difference?
Shared ownership means you only own a percentage of the property. Shared equity means that you buy the whole property and pay for a percentage of it with a deposit and mortgage. The remaining percentage is covered by an equity loan, kind of like a second mortgage, either from a housing association or private developer. Sometimes there’s interest to pay on the loan.
Sounds interesting. Where do I go first?
If you’ve already got your eyes on an affordable development, you can contact the housing provider directly, whether it’s a housing association or a private developer. However, all applications have to go through a HomeBuy agent, who will guide you through their application process to see if you’re eligible for the scheme, so they would be the best starting point.
A HomeBuy agent?
Because there are so many providers offering the HomeBuy options, the government has appointed a network of HomeBuy agents as a first point of contact to help you through the application process. There’s one for each area. They’ll give you advice on what options are available to you. You can find a list of HomeBuy agents and the areas they cover at www.homebuy.co.uk .
What do you mean by 'housing provider'?
A housing provider is an umbrella term for any organisation that operates an affordable home ownership scheme. This can be a housing association, local council, private developer or occasionally some other organisation entirely. To make matters even more complicated, housing associations are also known as Registered Social Landlords (RSLs). We use the term 'housing provider' to cover all of these.
How do I know whether I’m eligible?
This is the good news! If you’re a first-time buyer, your household income is less than £60,000 and you can’t afford a home that meets your needs on the open market, you are likely to qualify for help.
I thought I needed to be a nurse, or police officer or something like that?
You mean a ‘keyworker’. Yes, some schemes do give priority to keyworkers, but that doesn’t mean people with other occupations aren’t eligible. The government recognises that everyone should be able to buy a home that meets their needs, so they widened the scope of the schemes to benefit more people.
What about the credit crunch? Isn’t now a terrible time to buy a home?
Not really. This could be a great time to buy if you’re a first-time buyer. In fact, falling house prices have brought the possibility of owning your own home even closer, because properties you might not have been able to afford a year ago are now within reach. Now is a particularly good time with the range of affordable schemes available, because providers are offering more and more incentives to encourage people to buy.
I’m not sure I want a new build and there aren’t any in my area anyway. What can I do?
You can look at buying a resale property. This is a property which has been purchased through a shared ownership scheme by someone just like you, and they’re now looking to sell their share and move on. Housing associations have lists of properties available, and there are also websites which deal solely with shared ownership properties.
Aren’t these schemes just for young single people or couples?
Not at all. Many of the properties available have two or more bedrooms and are ideal for families, so people with children are actively encouraged to apply. And you don’t have to be young either. As long as you have access to the funds to pay for your share in the property, you can take advantage of the HomeBuy schemes.
If I find a property I like, am I guaranteed to get it?
Not always, because allocation is on a strict priority basis. Your assessment will indicate your priority for a particular property, and if you’re not top of the list for one, you’re likely to be for another, so keep trying.
What if I want to buy a bigger share later on?
This is called ‘staircasing’ and is actively encouraged. As things progress and you can afford to buy more, you can approach your housing provider to buy further shares.
What other help do I need?
A solicitor is essential, particularly one who specialises in affordable home ownership, otherwise it can become a complicated business. We also recommend you get an independent financial advisor (IFA) who again specialises in the field. Together, they’ll help make sure you don’t over-stretch yourself financially. To get you started, there’s a list of specialists at the back of the magazine. Your housing provider or HomeBuy agent will also be able to refer you to suitable companies.
Anything else?
Yes – good luck and enjoy your new home!