Find out about the HomeBuy Schemes
Contents
New Build HomeBuy
First Time Buyer Initiative
Social HomeBuy
Intermediate Rent
Open Market HomeBuy
There is a variety of low cost homeownership schemes available. You may want to talk to an independent financial advisor before applying. They will be able to help you choose which are the best schemes for your circumstances.
NEW BUILD HOMEBUY (Part buy, Part rent)
What exactly is Newbuild HomeBuy?
Newbuild Homebuy formerly known as Shared Ownership is a government funded scheme that makes home ownership available to first time buyers. The scheme enables you to purchase a share (usually 50%) in a home specifically built for Shared Ownership and pay a discounted rent on the remaining share.
Priority will be given to council tenants, those who are tenants of a Registered Social Landlord or people who are registered on a Local Authority Housing waiting lists.
Mercian is the Governments appointed HomeBuy Agent for the West Midlands area. From April 2006 Mercian operates a one-stop-shop for all affordable housing. You need only to complete one application form to give you access to all affordable housing options throughout the West Midlands. We will assess your eligibility and direct you to schemes which best meet your individual requirements.
How do I apply?
To apply you need to complete an application form and return it to us. Please complete the form fully and check you have included all the supporting documents we require to assess your position. You can download an application form from this website or contact us and we will send you an application pack.
What happens after I have submitted my form?
Once we have your fully completed application form we will assess your circumstances and work out if you are eligible. We will make a decision within 8 working days of receiving your form. We will then write to you to let you know our decision. If you are accepted for the schemes, your details will be put onto our database. If you are not accepted, we will explain the reasons why.
If you wish to apply for a new home at a specific development where for example you may have seen a sign board or an advert please state the name of the development clearly on your application and we can fast track your application.
When new homes become available we match the property details to applicants who are registered on our database and forward your details to the associations developing the scheme who will then get in touch with you direct.
Sometimes developing associations will need to comply with local authority letting policies which often gives priority to people with local connections. If you already live and work close to a scheme being developed your chances of obtaining a new home will usually be improved.
The final sale details will be confirmed between you and the Housing Association developing the scheme.
How will I know what is available?
Some new homes will be available now, others are being built and will be ready in the future. New homes are very popular and we accept applications in advance of the homes being completed. We publish separate listings with information about the new homes being developed and information and pictures will be regularly updated on our website www.homebuyagents.org.uk
Please state clearly the areas you wish to be considered for when submitting your form to ensure accurate scheme matches to your requirements.
We may also have refurbished properties available under part buy/part rent and resale properties where existing shared owners are offering their properties for sale. If you have identified a specific property for sale please state the full address of this property when submitting your form.
What happens when a suitable scheme/ property becomes available?
The Association developing the scheme will meet with you and discuss your application, invite you to view a property and explain the terms and conditions of the purchase. Once you have been offered and accepted a property you will be required to make a non-refundable deposit to reserve your home.
Can I choose what % share of the property I buy ?
Applicants usually purchase 50% shares in these homes, however schemes will differ from between 25% and 75%, often depending upon local agreements with local authorities. A discounted rent is payable on the remaining share and you can increase your level of ownership at a later stage. The monthly costs of rent and mortgage works out cheaper than the cost of a full mortgage on the property.
Can I buy additional shares?
On most schemes you can usually purchase additional shares which is called ‘staircasing’, however their may be restrictions in place on certain schemes which is dependant on the local agreements in place. You will need to check with your Solicitor the specific leasehold terms for the property you are purchasing. Staircasing is usually done in 10% or 25% chunks and rents are reduced accordingly. You are however under no obligation to buy further shares.
What happens if I want to move?
You will need to contact the Association owning the balance of the share in your property who will advise you on their procedures. They will liaise with us to try to identify a suitable purchase from our list. Associations often have a four week period in which to nominate a prospective purchaser. The price that the share will be sold for is based on an independent valuation (the fee for this valuation is paid for by the owner who is selling).
If the Association does not make a successful nomination then you are usually free to sell your share on the open market. Any purchaser you find will need to be approved by the Association.
Who is responsible for repairs?
You will be responsible for maintaining and repairing your home. If there is a service charge in place the details of this will be explained to you by your Solicitor.
If you want to make any improvement or alterations to your home, you must first obtain written agreement from your Housing Association.
Legal Advice
When you buy a property you will also need to appoint a Solicitor to act on your behalf. We are currently reviewing our panel of Solicitors and will publish our panel in due course. We would recommend you use a Solicitor familiar with Newbuild Homebuy to avoid delays in your purchase.
We would advise you to obtain at least three written estimates of charges from Solicitors, before making a final decision as to which firm you will use for your conveyancing.
You will need to check with your Solicitor whether stamp duty is payable on your purchase.
Financial Advice
You will need to seek Independent Financial Advice. We can supply you details of Financial Advisors familiar with New Build HomeBuy . The lender must be advised that you are purchasing through the Newbuild HomeBuy scheme. Only certain lenders are set up to issue mortgages on this product. The rules for Homebuy means you must use a ‘Qualifying Lender’. These are banks, building societies, insurance companies and friendly societies.
FIRST TIME BUYER INITIATIVE (FTBI)
What is FTBI?
FTBI is government-assisted scheme which helps people to buy a newly built home from a private developer. These homes are only available on specific sites. Currently we have 5 sites in our area. FTBI is an equity share scheme where you are helped to buy your new home with an equity loan of up 50% of the property's value. For the first three years of FTBI there are no additional payments to make other than your mortgage. After three years, you will pay a charge to the government (through the HomeBuy Agent) of 1% a year on the unowned equity . This charge rises by 1% every year reaching a maximum of 3% after you have been in your property for five years.
When you want to sell your FTBI home, you will have to repay the government's equity. So if you initially bought 75%, you will repay the government 25% of the value of the property at the time you sell it.
FTBI homeowners can also choose to increase their equity share at any time by purchasing more equity from the Government at the current market value. The minimum additional purchase is ten per cent of the market value.
Who can buy?
Anyone who cannot afford to buy a suitable home on the open market and is a first time buyer can apply.
You will need to have enough household income to support your mortgage (usually at least £12,000 a year). A maximum household income of £60,000 will apply.
As well as being in an eligible group to purchase, if you apply for an FTBI home, you must be able to cover the costs of buying. This will include solicitor’s fees, stamp duty and, in some cases, a reservation fee or deposit.
Where are FTBI homes available?
Currently we have five sites:
How do buyers find out more and make an application?
As FTBI is limited to particular developments we would suggest that you visit the developments you are interested in first. If you would then like to apply for the scheme, you can do this through the developer's Sales Office on the site where the staff will be able to provide you with an application form. Alternatively, you can download an application form from this website, complete it and return it directly to us. Please complete the form fully and check you have included all the supporting documents we require to assess your position. You can download an application form from this website or contact us and we will send you an application pack.
For more information about FTBI you can Download the First Time Buyers Guide
SOCIAL HOMEBUY
Social HomeBuy allows social housing tenants to buy their current home either outright or on shared ownership terms with the benefit of a discount. To do so, their landlord must have decided to take part in the scheme.
This is likely to be of interest to tenants who don’t qualify for the Right to Buy or the Right to Acquire or who are not currently in a position to buy their home outright.
What is Social HomeBuy and how does it work?
Housing association or council tenants can buy their existing homes, where the landlord has decided to offer this opportunity. Homes are usually bought on a shared ownership basis with a minimum share of 25%. However, the property can be bought outright at the outset.
The maximum discount will vary between £9,000 and £16,000, depending on the location of the property. The amount of discount payable will be in proportion to the initial amount purchased. There is only one payment of discount, payable on the purchase of the initial share. For that reason, purchasers are encouraged to buy as large a share as they can afford from the word go.
If the property is sold within five years, the discount is repayable. When the purchaser comes to sell their home, the landlord will have the chance to buy the property back at market value or nominate another purchaser.
Who is eligible and what are the selection criteria?
You can purchase a share or 100% of the property outright.
How do I apply?
Contact your existing landlord direct.
INTERMEDIATE RENTS
The Intermediate Rent scheme is designed to assist in the recruitment and the retention of frontline key workers by making homes available for rent. This is particularly relevant for staff in the health, education and community safety sectors, whose services are essential to local communities but who are unable or do not wish to purchase a home. The intention is to target key workers who cannot afford market rents in areas within a reasonable travelling to work distance of their workplace.
Only existing secure or assured tenants of participating housing associations or councils are eligible. Tenants who are facing legal action for anti-social behaviour or breaches of their tenancy agreement cannot take part.
OPEN MARKET HOMEBUY
Open Market HomeBuy schemes allow you to buy a property from the open market, usually by choosing a property via an estate agent. You will be helped to buy your home with an equity loan, partly funded by the government. When you sell your home, you will have to pay back the equity loan at the current market value. Two new equity loan schemes were launched on 1st April 2008:
The Ownhome scheme provides an equity share of between 20% and 40% of the cost of a property. You won't have to pay any interest on your unowned share for the first 5 years. After that you will have to pay interest at a fixed rate of 1.75% each year. After a further 5 years this increases to a fixed rate of 3.75% a year. This scheme is offered by Places for People, a property management and development company in partnership with the Co-operative Bank. You will have your mortgage with the Co-operative Bank.
The MyChoice HomeBuy scheme provides an equity share of between 15% and 50% of the cost of a property. You will pay a fee of 1.75% on your unowned share from day one. This will increase by up to RPI plus 1% every year. This scheme, offered by a consortium of housing associations, allows you to choose to take out your mortgage with any approved high street lender.
With both schemes you can choose to increase the proportion of the property you own by buying additional equity shares.
Am I eligible?
Open Market HomeBuy schemes are aimed at helping first time-buyers, who could not otherwise afford to buy a property, onto the housing ladder. If you are going through a relationship breakdown you may also be eligible. Your total household income must be at least £12,000 a year and no more than £60,000 and you must not have an adverse credit history.
How do I apply?
To apply you need to complete an application form and return it to us. Please complete the form fully and check you have included all the supporting documents we require to assess your position. You can download an application form from this website or contact us and we will send you an application pack.
What happens after I have sent in my application?
Once we have your fully completed application form we will assess your circumstances and work out if you are eligible. We will make a decision within 8 working days of receiving your form. We will then write to you to let you know our decision. If you are accepted for the schemes, your details will be put onto our database so that the Open Market HomeBuy providers can contact you directly to progress your application. If you are not accepted, we will explain the reasons why.
application form
Download First Time Buyers Guide v5
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