Help to Buy Agents
Help to Buy (previously known as HomeBuy) is a government initiative that provides a ‘one-stop shop’ service to assist eligible individuals and families find affordable housing. The initiative provides information on a range of schemes that are available to people who may not be able to buy a home on the open market.
If you can’t afford to buy your first home, Help to Buy can assist. You may be a first-time buyer who has been priced out of where you want to live, or be unable to raise the necessary deposit to buy a property outright. Whatever the reason – if you need help to buy your first home, this initiative can give you the chance to get onto the property ladder.
Help to Buy Agents
The government has appointed a number of agents across England to administer Help to Buy. These agents are professional not-for-profit organisations that specialise in providing affordable homeownership opportunities.
Catalyst Housing (www.catalysthomebuy.co.uk) is the appointed Help to Buy Agent for Berkshire, Buckinghamshire (including Milton Keynes), Oxfordshire and Surrey.
The service is essentially a "one-stop-shop" service for government supported home ownership and rental opportunities that exist in these areas. By registering with Catalyst HomeBuy, individuals are assessed to identify the schemes they are eligible for. They also work with a number of organisations including housing associations, private developers and local authorities to ensure customers are kept informed about all the opportunities available to them.
Also, Catalyst HomeBuy organises regular home ownership shows. At these events, housing providers attend and give information on opportunities that they currently have available. Independent financial advisers and solicitors provide affordability assessments and offer advice free of charge. The home ownership show is a great opportunity to find out more information and have queries answered face to face. Entry to these shows is free so visit the website for the latest dates.
There are a number of different scheme types that are offered under the Help to Buy initiative. Depending on your individual circumstances you may find that one or more of these are available to you.
Shared ownership schemes
Shared ownership is a part-buy/part-rent scheme that enables the purchaser to buy a percentage of a newly built or resale property, usually from a housing association, and pay rent on the remaining percentage.
Help to Buy Shared ownership - New build
Under this scheme, you need to purchase the maximum share that you can afford, which is normally a share of between 25% to 75% of the full market value. The combined monthly cost of your rent and your mortgage will usually be less than buying the property outright.
After one year of ownership, you are able to buy additional shares in increments of 10%, until you own 100% of your home. This process is called ‘Staircasing’.
Shared ownership is especially appealing if you are unable to:
- Raise a sufficient deposit to allow a mortgage to be approved.
- Obtain an adequate mortgage approval to purchase a property outright even if you have a healthy deposit.
Shared ownership - Resales
Resales are shared ownership homes that become available when existing ‘shared owners’ wish to sell their stake in their property. This normally happens when people move up the property ladder.
The share that can be purchased, and the rent payable, will be different for each property and will depend on the percentage initially purchased and the amount of staircasing that has taken place.
Rent to Buy
Under this scheme, purchasers have the opportunity to rent a newly built property from a housing association, at a rate which is normally 80% (or less) of the current market rental value. The rent is payable for a limited period, after which the tenant can purchase a share in the property on a shared ownership basis. The rental period aims to give the prospective purchaser(s) an opportunity to save for a deposit to put towards buying a share of the property that they are renting. However, there is no obligation to buy a share in the property.
Please note that there is limited availability on this scheme.
Help to Buy Equity Loan Scheme
Help to Buy equity loan is the latest homeownership scheme aimed at helping all home buyers across England to purchase a new build home with the assistance of low-deposit mortgages.
You will need to buy a newly built home from a participating registered developer, whether you are a first-time buyer or an existing homeowner. Unlike previous schemes, there is no upper income cap for buyers. The government will give you an equity loan of up to 20% of the full value of a new build home. The remaining purchase price of at least 80% will need to be funded by a mortgage (including the 5% deposit). There is no interest to pay on this equity loan for the first five years. Once you have found a home available through this scheme, please visit www.catalysthomebuy.co.uk to complete a Property Information Form to start the application process.
Help to Buy Mortgage Guarantee scheme
The Help to Buy Mortgage Guarantee scheme can help you buy a newly built home or an existing property with a deposit of as little as 5%. This scheme is not administered via Help to Buy Agents, you must contact participating lenders directly for more information.
The scheme works by offering lenders the option to purchase a guarantee on mortgages where a borrower has a deposit of between 5% and 20%. To qualify for this scheme, you must pass lender affordability checks and have no history of difficulties in meeting debt payments.
In order for your mortgage to be eligible for the mortgage guarantee scheme:
- it must be a residential mortgage, so you will be planning to live in your house and not rent it out;
- the property you want to buy must be in the UK and the purchase value must be £600,000 or less;
- the mortgage must be taken out on a repayment basis, rather than interest-only;
- the mortgage must be to buy your only property, so you cannot have an interest in any property, anywhere in the world; and
- the mortgage cannot be for a shared equity or shared ownership purchase
You can apply for a mortgage guarantee through a participating mortgage provider. The following lenders are currently participating in the scheme:
Contact a participating mortgage provider directly for more information about how you can benefit from the Help to Buy Mortgage Guarantee scheme.
- Bank of Scotland
Other Equity Loan Schemes
Equity loan schemes offer low interest loans that boost a purchaser’s affordability by topping up their maximum mortgage capability. When available, these schemes are either linked to specific local authority areas and/or certain employers sectors. They may be restricted to either new build developments or ‘open market’ properties. Please call the team on 0845 601 7729 to find out if there is a local authority equity loan scheme in your area.
The Armed Forces Home Ownership scheme is a pilot scheme designed to assist serving members of the British Armed Forces (with four to six years continuous service) to find a suitable home on the open market.
This scheme provides you with a loan of between 15 – 50% of the value of the home you choose on the open market. For example, if you qualify for a mortgage of £70,000 and have a deposit available of £10,000, you could potentially purchase a property worth up to £155,000.
Please note this scheme is expected to run until March 2014 and is being managed and delivered by the Swaythling Housing Society. You can contact them on 0800 028 1980 or visit www.afhos.co.uk for more information.
Intermediate Market Rent provides a short-term tenancy at 80% of typical market rates in order to help you save a deposit to get onto the housing ladder. In most cases, the initial rental period is for six months and your ongoing need for the property may be reviewed on a regular basis. At a later date, and under some circumstances, tenants may have the option to buy a share of the property by converting the tenure to shared ownership or through Rent to Buy.
Intermediate Market Rent
This scheme allows housing association and local authority tenants to buy their current home either outright or on a shared ownership basis with the benefit of a discount. To do so, your landlord must have decided to take part in the scheme. This is likely to be of interest to tenants who do not qualify for Right to Buy or Right to Acquire, or who are not currently in a position to buy their home outright. Contact your landlord for more details.
The maximum discount available through this scheme varies from £9,000 to £16,000, depending on the location of the property and the size of the share you are purchasing. If you want to buy another share in your home later on, you will get a discount on that too.
The government’s Homes and Communities Agency also funds two other types of shared ownership schemes for vulnerable groups - Home Ownership for People with Long-term Disabilities (HOLD) and Older People’s Shared Ownership. For more details on these schemes, please visit www.catalysthomebuy.co.uk for more information.
Am I eligible?
If you are finding it difficult to get on to the property ladder or to find a suitable private rental solution, why not look at Help to Buy homeownership options to see if you are eligible.
Help to Buy Shared Ownership Schemes
- Your annual household income must not exceed £60,000
- In most circumstances you must not have been in rent arrears over the last 12 months. Due to standard mortgage evaluation checks, it is unlikely that you will be able to purchase a property if you have a low credit rating
- Your name, or the name of any joint registrant, must not currently be on the deeds of another property either in the United Kingdom or overseas.
Help to Buy Equity Loan Scheme
Open to all home buyers, not just first-time buyers
- There is no household income limit
- You can purchase a new-build property with a maximum value of up to £600,000
- You will need a minimum 5% deposit to qualify
- You will need to have appropriate checks to make sure you can repay the mortgage, as well passing your chosen mortgage lender’s credit and affordability assessments
- The property purchased must be your only residence - you cannot use this scheme for Buy to Let investments.
Visit www.catalysthomebuy.co.uk to find out which developers are building in Berkshire, Buckinghamshire (including Milton Keynes), Oxford and Surrey.
The government has prioritised the following four groups under this initiative:
Existing Social Tenants
Tenants who currently live in a council or housing association property on an ‘assured shorthold tenancy’ basis or in an ‘affordable rent’ property.
Ministry of Defence (MoD) Personnel
Specific categories of staff employed by the Ministry of Defence as specified by the government’s Homes and Communities Agency (HCA). Please visit www.catalysthomebuy.co.uk for more information.
Some local authorities may specify individuals or groups that they want to prioritise in their area.
Individuals and families who want to get onto the property ladder.
Other Priority Considerations
A number of other eligible groups as specified by individual local authorities, may be considered for Help to Buy options on a case by case basis. These include people who may be experiencing a major change in circumstances such as:
- Overcrowding of an existing property due to a new family addition
- A forced sale, e.g. divorce/separation
- Needing to care for a sick relative
If you have any questions about your eligibility for the Help to Buy initiative, please call the Catalyst HomeBuy team on 0845 601 7729.
How to register with Catalyst HomeBuy?
Visit www.catalysthomebuy.co.uk to register online or you can call 0845 601 7729 for a registration pack to be sent to you. You will be notified within four working days confirming whether you are eligible or not for the initiative.
Please note for the Help to Buy Equity Loan scheme, once you have found your property, you can download the Property Information Form from www.catalysthomebuy.co.uk.
This information is provided by Catalyst Housing and is subject to change so please visit the website – www.catalysthomebuy.co.uk for the latest details as this is updated regularly. Catalyst Housing accepts no responsibility in relation the accuracy of information provided.