What is HomeBuy
HomeBuy is a Government initiative that assists eligible individuals and families to find homes that meet their current needs. The Government has appointed a number of HomeBuy Agents throughout England to help those who are seeking to live in specific areas. For many people, this program will provide the best chance of owning a home in the area in which they want to live and work. The initiative also offers discounted rental options for those who are eligible.
What is a HomeBuy Agent and who are Catalyst Housing Group?
Epsom & Ewell Borough Council work with Catalyst Housing Group, the Government appointed Homebuy Agent covering the Surrey area, to promote the HomeBuy initiative and all the available options.
Catalyst Housing Group provides a "one-stop-shop" service for 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. Catalyst work with a number of organisations such as other housing associations, private developers, estate agents and local authorities to ensure customers are kept informed about all the opportunities available to them.
Catalyst also organise regular HomeBuy shows. At these events, independent financial advisers and solicitors provide affordability assessments and advice free of charge. The HomeBuy 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 HomeBuy initiative. Depending on your individual circumstances, you may find that one or more of these are available to you.
Shared Ownership is a part-buy/part-rent scheme (previously known as NewBuild HomeBuy) that enables the purchaser to buy a percentage of a newly built property, usually from a housing association.
Initially under this scheme, the purchaser normally buys between 25% to 75% of the newly built home from the particular provider. The provider then retains ownership of the unsold share on which a subsidised rent is implemented. The rent is normally paid on a monthly basis as it would if rented from a private landlord.
Staircasing is the term used when the ‘shared owner’ can purchase further shares in the property (normally at a minimum of 10%) if they wish. This is done if and when they can afford to do so, until the property is owned outright (subject to terms and conditions).
This scheme is especially appealing to individuals who 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 when a ‘healthy’ deposit is available.
Resales are shared ownership homes that become available when existing ‘shared owners’ wish to sell their stake in the property they currently own. This is normally as a result of them moving up the property ladder due to a change in circumstances.
The share that can be purchased and the rent payable will differ from one property to another. This is a result of differences in the percentage initially purchased and any staircasing activity that has occurred.
Equity loan schemes offer low-interest loans that boost a purchaser’s affordability by topping up the mortgage that they are able to get. These schemes allow individuals and families to purchase a property that they would normally be unable to afford. The loans offered will have varying repayment requirements depending on the specific provider and will sometimes offer interest free periods, followed by very favourable terms.
These schemes, when available, can either be attributed to specific local authority areas or employer segments and may be restricted to either new build developments or ‘open market’ properties. This will normally be dependent on who has developed the scheme.
FirstBuy is an equity loan scheme which offers eligible individuals the opportunity to buy a new home, in a specified new development, with the assistance of a loan of up to 20% of the full purchase price of the property. The FirstBuy equity loan has no interest payment applied for the first five years. From year 6 onwards an interest charge is payable.
FirstBuy will soon be available at selected developments across the Berkshire, Buckinghamshire (including Milton Keynes), Oxfordshire and Surrey from a range of developers. Please go to www.catalysthomebuy.co.uk for the latest information on this scheme.
HomeBuy Direct is a shared-equity scheme designed to help first time buyers have 100% ownership of their property. The purchaser will be the legal owner with full title to the home and can sell it on the open market without restriction.
The buyer buys a new home, on a designated HomeBuy Direct development, with assistance from the Government and the house builder in the form of two equal equity loans.
The equity loans would be up to 30% of the purchase price leaving the applicant to raise 70% by way of a mortgage plus a deposit, if available.
The equity loans are interest free for the first five years. After that, there is a fee of 1.75%, rising annually by the Retail Price Index (RPI) plus 1%.
Rent To Buy
Under this scheme, purchasers have the opportunity to rent a newly built property provided by a housing association (or other provider) at a rate which is normally 80% (or less) of the current market rental value. The rent is payable for a predefined period after which there is an expectation that the tenant will purchase a share in the property through the Shared Ownership scheme, thus becoming a ‘part-owner’.
The rental period is designed to give the prospective purchaser(s) an opportunity to save for a deposit to put towards buying a share of the property they are renting at a later date, ie through shared ownership. Some providers of this scheme will also offer incentives to save while the property is being rented. However, there is no obligation to buy a share in the property should the tenant not wish to, eg if the person's personal circumstances change and the property no longer meets their requirements or aspirations.
Intermediate Rent provides a short term tenancy at 80% of typical market rates. In most cases the initial rental period is for six months and the person’s ongoing need for the property may be reviewed on an ongoing basis. Under some circumstances, at a later date, tenants may have the option to buy a share of the property by converting the tenure to Shared Ownership.
This scheme allows some housing association or local authority tenants to buy their current home either outright or on a part-buy/part-rent basis 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 do not qualify for the 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.
Eligibility rules have been amended by the Homes and Communities Agency (HCA) for existing homeowners.
As a result, all current home owners who wish to be considered for any HomeBuy schemes are now required to have a 'Priority Need for Accommodation' approved by their current local authority BEFORE they can be accepted on to the HomeBuy register.
Once you have completed HomeBuy registration, you will be advised of the process for local authority approval. The priority need for accommodation will be assessed in accordance with the Housing Act 1996.
In addition, to be eligible for HomeBuy schemes, candidates must fit into one of the following criteria and must NOT have a household income in excess of £60,000 per annum.
Once you have met the initial eligibility criteria, the Government has prioritised the following four groups:
Existing Social Tenants
Those that currently reside in a Council or Housing Association property on an ‘assured short-hold tenancy’ basis, where if they were to vacate the property it would be made available to someone on a priority list for housing in that area.
Ministry of Defence Personnel
Specific categories of staff employed by the Ministry of Defence as specified by the Homes and Communities Agency (HCA).
Some local authorities may specify individuals or groups that they want to prioritise in their area of operation. This may include employees of specified public sector organisations etc.
First Time Buyers
Individuals and families that are seeking their first step on to the property ladder.
Other Priority Considerations
A number of additional eligible groups have been identified as those that may be considered for the HomeBuy Options available on a case by case basis. These include those that may be experiencing a major change in circumstances such as:
Other eligibility considerations
- Overcrowding of an existing property due to a new family addition
- A forced sale, eg divorce/separation
- A requirement to care for a sick relative.
In most circumstances you must not have been in rent arrears over the last 12 months. Due to standard mortgage evaluation checks, it is likely that if you have a low credit rating you will be unable to proceed in the purchase of a property.
Your name, or the name of any joint registrant, must not currently be on the deeds of another property whether in the United Kingdom or abroad. However, under certain circumstances this may be flexible. If you have a query on this, please call the HomeBuy Team on 0845 601 7729.
You are required to certify that the information you provide is complete and accurate.
So if you meet these requirements what should you do now?
To apply for Homebuy you need to apply to the Council’s Housing Needs Register and also with Catalyst Housing Group. All applicants may be subject to confirmation of employment status and eligibility criteria.
Housing Needs Register and Low Cost Home Ownership application form (pdf - 723kb)
Register with Catalyst HomeBuy by setting up your personal profile online at www.catalysthomebuy.co.uk. Alternatively, call the HomeBuy Team on 0845 601 7729 for a registration form.
What happens next?
Once on the Catalyst Housing Group’s HomeBuy Register, you will:
- Receive a letter or email confirming your eligibility and outlining the level of assistance you are likely to receive
- Be kept up-to-date with the latest changes in affordable home ownership opportunities
- Receive marketing details of any suitable new affordable housing schemes that are being developed in the district
- Receive details of re-sales of existing shared ownership properties
- Have access to any other HomeBuy schemes promoted by Catalyst and advertised through the HomeBuy website, subject to any eligibility criteria.
Housing Services 01372 732000
Catalyst Housing Group 0845 601 7729