Summary
There is help available for those having difficulty getting on the housing ladder. Government schemes are available aimed at first-time buyers and others. Check with your local HomeBuy agent for details.

Home-Buying Schemes

The government is anxious to help first-time buyers, social tenants and key workers to own their homes. Currently there are three home-buy schemes available for those eligible: New Build HomeBuy, Social HomeBuy and Open Market HomeBuy.

With this scheme the buyer shares ownership with the housing provider. He or she pays for a minimum of 25 per cent of a new property with a mortgage, then pays a monthly subsidised rent of up to 3 per cent a year of the value of the housing provider's remaining share.

With ‘staircasing' they can purchase more shares whenever they can manage it until they own the entire property.

Social HomeBuy is a similar scheme but is aimed at social housing tenants who can't afford to buy the property they are renting or do not have rights to do so.

Again, they buy at least 25 per cent of the property at a discount (usually between 9,000 and 16,000 pounds sterling) with a mortgage, then pay a subsidised rent of up to 3 per cent of the remaining value owned by their landlord.

Further shares can be bought later, again at a discount, until they own the property outright.

Two Open Market HomeBuy schemes are currently available.

With the MyChoiceHomeBuy scheme a housing association makes an equity loan to the purchaser of 15 to 50 per cent of the value of the property. He or she then buys the property on the open market with a mortgage for the remaining amount.

There is a fee for the equity loan of 1.75 per cent in the first year with a rise of one per cent above the rate of inflation every year.

If the equity loan provider allows it, the buyer can re-mortgage at any time.

When the property is sold the loan is re-paid, but it could be re-paid sooner. Any increase in the value of the property is split with the equity loan provider.

OwnHome is the second scheme available and differs from MyChoice in that a housing association called Places for People provides the equity loan of 20 to 40 per cent, and Co-Operative Financial Services provides the mortgage for the remaining cost.

The equity loan is interest free for the first five years, and then 1.75 per cent is payable in the sixth to tenth years rising to 3.75 per cent from the eleventh year onwards.

A buyer can use a deposit they already have saved with both schemes.

Another scheme aimed at giving 10,000 first-time buyers a leg-up onto the property ladder is HomeBuy Direct.

The government and the housing developer with share equally the cost of providing an equity loan to the buyer of a new build property, up to 30 per cent of the value. He or she then takes out a mortgage for the remaining amount.

Interest is charged after five years as with the OwnHome scheme.

Key workers such as teachers, nurses and policemen and women living in London and the east and south-east of England are given special help, either to buy their first property or to move to larger accommodation. There are different rules regarding eligibility in the different areas.

You should contact your local HomeBuy agent about any of these schemes.