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Government Help for First Time Buyers
The government is constantly concerned with housing issues from housing the homeless to helping first time buyers onto the property ladder.
Its primary aim is to ensure that all communities have access to the right blend and amount of key workers – after all, we all need nurses, firemen, teachers and other important public service employees in our midst.
For this reason, the Government schemes are geared towards key workers and those considered being in need of housing. New Build HomeBuy Rent and Open Market HomeBuy are also for first time buyers who have a household income of less than £60,000 per anum. Their schemes generally involve some sort of co-ownership or co-financing.
At any time there is a list of who has housing priority in your area. To find out if you might be considered a key worker or qualify for HomeBuy, you should contact your local HomeBuy Agent.
The main government schemes for first time buyers are:
- Shared Ownership (called New Build HomeBuy)
- Shared Equity (called Open Market HomeBuy)
- Right to Buy
(called Rent to HomeBuy)
Shared Ownership (New Build HomeBuy)
Shared ownership means owning part of your first home in conjunction with a co-owner, typically a Housing Association. You have a shared ownership mortgage for the part that you own. You will need to put down a sum of money, usually a few thousand pounds to cover costs. You will need to pay rent to your co-owner for the share of the property you do not own but that you live in. As the name suggests, property available within the New Build HomeBuy scheme is pre-selected by the Housing Association and is typically either new or refurbished.
You can find out more about shared ownership in our shared ownership section.
Shared Equity (Open Market HomeBuy)
As the name suggests, the government and mortgage lenders will help first time buyers who qualify, buy any property on the open market – new or old. With this scheme, the first time buyer takes out a shared equity mortgage available on the open market and an 'equity loan'. At first the top up loans are interest free or very cheap, depending on which option you take. When you come to sell the property, you will forfeit some of any increase in the value of it to the lender of the 'equity loan'. There are a considerable number of conditions that apply to applicants of this scheme. A grant is also available to help with expenses.
Social HomeBuy
The government recognises that many local authority tenants wish to have and build a stake in the property that they rent. This scheme will enable tenants of local authorities and housing associations to buy a share in their current home. It only applies to landlords who want to participate in the scheme. It allows tenants to buy as little as 25% of their property. Tenants should approach their landlord.
Equity Loans
Available to eligible applicants, with mortgages from any lender, for any chosen property, the government will make interest free loans to the value of 50% of the value of the property. A considerable number of conditions apply and demand for these nearly always exceeds supply.
Right to Buy/Lease-Option (Rent to HomeBuy)
This scheme allows local authority tenants to buy the property they are renting at a discount from their landlord, to whom they should apply.
Rent to HomeBuy
The Government's lease option scheme whereby you rent a property at a discounted rate with the option to purchase it at a later date, using the money you have saved on the rent as part of a deposit.
Direct Loans (Direct HomeBuy)
Free or very cheap loans from the Governement to help you buy your first home.
Useful Websites
www.communities.gov.uk – the government's main site with information about housing
www.direct.gov.uk – offers a range of government information and services, including for housing
www.housingcorp.gov.uk – for more information about housing associations and where to find your local HomeBuy agent
www.FirstRungNow.com - for more information on all options for first time buyers
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