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First Time Buyer Mortgages
New Property Bargains for First Time Buyers

Help for first-time buyers: Shared Equity, Open Market HomeBuy, Social HomeBuy and Key Worker Living.

There are a number of government schemes designed to help key workers, social tenants and other first time buyers in England onto the property ladder, including HomeBuy and Key Worker Living.

Some of the new house-builders also offer shared equity - not limited to key workers. See more about this in our Property Deals and Bargains section.

For others of you are not key workers, the closest scheme to shared equity available is the 'shared appreciation' mortgage featured in our Best First Time Buyer Mortgage Table. As well as looking at mortgages you might want to contact your HomeBuy agent just in case you are entitled to take part in this scheme.

Contents of this section

 

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HomeBuy

On 1 April 2006 a new HomeBuy scheme was introduced to create a simpler and more streamlined system. There are three different HomeBuy products, with a new version of Open Market HomeBuy available from October 2006.

The three products are:

  • New Build HomeBuy where you buy a share of a property from a housing association, typically 50%, and pay rent on the rest. This was previously known as shared ownership. For more information click here.
  • Open Market HomeBuy where you buy 75% of a property yourself and the remaining 25% with the help of an equity loan.
  • Social HomeBuy where housing association and local authority tenants are given the opportunity to buy a share in their home at a discount. 

They are designed to help the following groups:

  • Key workers: those working in the public sector in health, education or community safety – such as teachers, nurses and police officers – in areas where high house prices are affecting recruitment and retention. Any assistance will need to be repaid if participants leave qualifying employment.
  • First time buyers: households who can't afford to buy their own home and who have been identified as eligible and prioritised for assistance within the region by the regional housing board.
  • Social tenants and those on the housing register: tenants of councils and housing associations, and those who are on the housing register, waiting for a council or housing association home to rent. 

The schemes available in particular areas and eligibility criteria vary from region to region. To find out what is on offer in your area, contact your local HomeBuy agent, which will register your interest and let you know what is available and the eligibility criteria that apply.

It is often, but not always, the case that key workers or those considered to be in housing need will take priority.

Similar schemes operate in Wales, Scotland and Northern Ireland. To find out more visit:

Wales

The Welsh Assembly www.housing.wales.gov.uk

Scotland

Communities Scotland www.communitiesscotland.gov.uk

Northern Ireland

The Northern Ireland Housing Executive www.nihe.gov.uk

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Open Market HomeBuy

What is Open Market HomeBuy and how does it work? 

Open Market HomeBuy is a shared equity scheme through which the government and mortgage lenders help people buy a property outright on the open market.

Available from 2 October 2006, you use your own money and get a mortgage from one of the four participating lenders – Advantage, Bank of Scotland, Nationwide or Yorkshire Building Society – for 75% of the cost of the property.

Your mortgage lender will then provide an equity loan for 12.5% of the cost and the government, via HomeBuy agents, will provide one for the remaining 12.5%.

Both equity loans are interest free for five years but after that interest of up to 3% could be payable on your lender’s equity loan, rising up to its standard variable rate after 10 years. You will never pay interest on the equity loan from your HomeBuy agent.

When you have paid the last of your mortgage repayments you will have to repay your lender’s equity loan and you will have to repay both when you sell. When you repay them you must share any increase in your property’s value with your lender and HomeBuy agent.

If you are able to buy a home through Open Market HomeBuy because you are a key worker but then leave qualifying employment, the HomeBuy agent’s equity loan will be repayable within two years and possibly the mortgage lender’s also.

Who is eligible and what are the selection criteria?

The scheme is currently intended mainly for key workers in London, the South East and the East of England but it will available on a more limited basis to social tenants and other priority first-time buyers.

Key workers include all clinical NHS staff except doctors and dentists, local authority employed clinical staff, teachers in schools and sixth form colleges, lecturers in further education, qualified nursery nurses in local education authority (LEA) nursery schools, police officers and community support officers, prison and probation officers, social workers, occupational therapists, educational psychologists, speech and language therapists, local authority planners, uniformed staff in fire and rescue service, members of teh armed forces in London and the South of England and rehabilitation officers for the visually impaired.

How do I apply?

Contact your HomeBuy agent.

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Social HomeBuy

Social HomeBuy allows housing association and local authority tenants to buy a share of their current home with the benefit of a discount. To do so, their landlord must have decided to take part in the scheme. While this is voluntary, the government is encouraging landlords to offer it.

It provides 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 to buy a share of their rented home.

What is Social HomeBuy and how does it work?

A minimum initial share of 25% of the property is bought on a shared ownership basis, although it can be bought outright at the outset. The landlord retains the rest and can charge a levy of up to 3% of the capital value of its share, although a lower target of 2.75% has been set.

The initial share will be sold with the Right to Acquire discount of between £9,000 and £16,000, depending on the location of the property. The size of the discount will be relative to the initial amount purchased.

Only the initial share can be bought at a discount so purchasers are encouraged to buy as large a share as they can afford to at the outset.

If the property is sold within five years, the discount is repayable. When you sell your home, the landlord will have the chance to buy the property back at market value or nominate another purchaser.

The Voluntary Purchase Grant scheme for housing association tenants has now been subsumed into Social HomeBuy.

Who is eligible and what are the selection criteria?

Only existing secure or assured tenants of participating housing associations or local authorities are eligible. Tenants who are facing legal action for anti-social behaviour or breaches of their tenancy agreement cannot take part.

Some properties that do not qualify under the Right to Buy or Right to Acquire schemes may be able to be sold under Social HomeBuy. However, there are exemptions, including homes in certain rural areas or groups of properties that have been provided for people with long-term disabilities or special needs.

Special features

You can purchase a share or 100% of the property outright.

How do I apply?

Contact your existing landlord direct.

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Key Worker Living

The Key Worker Living scheme is designed to help key workers in London, the South East and the East of England to buy a home, upgrade to a family home or rent a property at an affordable price. You should apply through your local HomeBuy agent.

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What is a key worker?

The government defines key workers as workers who are needed to provide frontline services in public areas, in parts of the country where housing and the cost of living is high. These areas have been primarily identified as London, the South East and the East of England.

You may be a key worker if:

  • You are employed in the public sector.
  • You work in a frontline role delivering an essential public service.
  • You work in a sector where there are serious recruitment and retention problems.

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Am I eligible?

The eligibility criteria vary, depending on the local recruitment and retention situation. You need to go directly to a HomeBuy agent to see whether you qualify for the scheme.

Typically, workers who can get help are:

  • NHS and local authority employed clinical staff except doctors and dentists.
  • Teachers and nursery nurses in schools and further education.
  • Police officers and community support officers.
  • Prison and probation service staff.
  • Social workers, nursery nurses, educational psychologists and therapists employed by local authorities, the NHS or CAFCASS.
  • Local authority planners.
  • Firefighters and other uniformed staff below principal level in fire and rescue services.
  • Members of the armed forces based in London and the South of England.

To find out which key worker schemes are operating in your area and whether you qualify, contact your local HomeBuy agent.

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What help is on offer?

As a key worker, you may get help in one of five ways:

  • Open Market HomeBuy to buy a home on the open market using a mortgage to pay for 75% of the cost and equity loans from your mortgage lender and the government for the rest. An equity loan is only repaid when you sell the property or stop being a key worker, so you do not make monthly repayments. Ask your HomeBuy agent for further information.
  • Higher-value equity loans of up to £100,000 for a small group of London school teachers with the potential to become leaders in their field.
  • New Build Home Buy where you buy at least a 25% share of a home from a housing association on a shared ownership basis and pay a reduced rent on the rest. For more details see our Shared Ownership section.
  • Intermediate renting at subsidised levels. The accommodation is provided by a registered social landlord and the rent set at a level between what would be charged by a private landlord and a social landlord.
  • The NHS provides some short-term intermediate rented accommodation for all its key workers. This is managed through the NHS accommodation website. You can find out more at www.nhs.uk/accommodation.

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More on Key Worker Living – frequently asked questions

What is the maximum amount of income I can earn to qualify?

The maximum household income is £60,000.

How much could I get through Open Market HomeBuy?

Your household's income, savings, financial commitments (other loans), the mortgage you are able to get and the cost of the property you want to buy will affect the amount you are loaned.

I teach in a school: how do I find out whether I am eligible for a higher-value equity loan?

Contact your local HomeBuy agent. In some areas of London the funding for higher-value equity loans has already been committed and no further funding will be available but teachers can still apply for Open Market HomeBuy.

Is there any restriction on the type of property I can buy?

You have to buy a property that is within a reasonable travelling distance of your workplace and is considered suitable for your household's needs.

If I want to buy with another key worker can we get two equity loans?

No. You would receive one loan based on your joint income.

For a more comprehensive list of FAQs visit www.communities.gov.uk

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HomeBuy agents

HomeBuy agents are registered social landlords that market housing schemes for key workers, social tenants and other priority first-time buyers in an area. They handle the application process for Open Market HomeBuy and New Build HomeBuy.

London
Tel: 0845 230 8099 
Email: via website
Web: www.housingoptions.co.uk

Kent, Sussex and Essex 
Tel: 07002 662846
Email: marketing@moat.co.uk
Web: www.homebuy.co.uk

Hampshire
Tel: 02380 628000
Email: homesinhants@swayhs.org.uk
Web: www.homesinhants.co.uk

Surrey
Tel: 0845 600 6699 
Email: homebuy@tvha.co.uk
Web: www.homebuy.co.uk

Berkshire, Buckinghamshire and Oxfordshire
Tel: 0845 601 7729
Email: homebuy@chg.org.uk
Web: www.homebuy.co.uk

Hertfordshire
Tel: 01582 869440
Email: leavalleyhomes@aldwyck.co.uk
Web: www.leavalleyhomes.co.uk

Bedfordshire and Cambridgeshire
(including Fenland and Peterborough, Forest Heath and St Edmundsbury)
Tel: 0845 456 6757
Email: info@keyhomes-east.org.uk
Web: www.keyhomes-east.org.uk

Norfolk and Suffolk
(except Forest Heath and St Edmundsbury) 
Tel: 0845 850 2050
Email: ofs@orbit.org.uk
Web: www.orbit.org.uk/ofs

South West North Zone
(Bath & NE Somerset, Bristol, Cheltenham, Cotswold, Forest of Dean, Gloucester, Kennet, Mendip, North Somerset, South Gloucestershire, Stroud, Swindon, Tewkesbury North, Wiltshire and West Wiltshire)
Tel: 0800 073 1315
Email: via website
Web: www.homebuy-southwest.co.uk

South West South East Zone
(Bournemouth, Dorset, Salisbury and South Somerset)
Tel: 0800 707 6707
Email: info@search4myplace.co.uk
Web: www.search4myplace.co.uk

South West Peninsula Zone (Cornwall, Devon, Taunton & Sedgemoor and West Somerset)
Tel: 01803 200300
Email: info@home2own.org.uk
Web: www.home2own.org.uk

Northamptonshire
Tel: 0845 456 6757
Email: info@keyhomes-east.org.uk
Web: www.keyhomes-east.org.uk

Leicestershire, Nottinghamshire and Derbyshire 
Tel: 0844 892 0112
Email: sales&marketing@emha.org  
Web: www.emhomebuy.org.uk

Lincolnshire
Tel: 0845 845 0800
Email: homebuy@eshagroup.co.uk
Web: www.home2you.co.uk/

Staffordshire, Shropshire, Wolverhampton, Walsall, Dudley, Birmingham, Sandwell, Solihull, Coventry and Warwickshire
Tel: 0845 607 6726
Email: Iwoodall@mercian.org.uk
Web: www.homebuyagents.org.uk

Herefordshire and Worcestershire
Tel: 0845 658 5420
Email: home2own@wmhousing.co.uk
Web: www.home2own.uk.com

Tyne & Wear, Northumberland, Tees Valley and County Durham 
Tel: 0191 229 7333
Email: homebuy@nomad-homes.co.uk
Web: www.nomad-homes.co.uk

Merseyside
Tel: 0845 603 4559
Email: via website.
Web: www.homeshub.co.uk

Greater Manchester and Lancashire
Tel: 0161 447 5108
Email: helen@plumlife.co.uk
Web: www.plumlife.co.uk

Cumbria
Tel: 0800 358 1400
Email: enquiries@affordable-homes.co.uk
Web: www.affordable-homes.co.uk

Cheshire
Tel: 0845 112 8800
Email: sales@riverside.org.uk
Web: www.cheshirehomebuy.org.uk

North Yorkshire and Humberside
Tel: 0800 633 5670
Email: homebuy@jrht.org.uk
Web: www.jrht.org.uk

West and South Yorkshire
Tel: 0113 243 6893
Email: enquiries@my4walls.co.uk
Web: www.my4walls.org.uk

An equity loan can help you buy a property of your own. However, you are still likely to require a mortgage. To enable you to make informed decisions, it is wise to seek financial advice.

For information about mortgages that are currently available click here for advice from MortgageAngels.

For a quote for legal services relating to homeownership click here.

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Other help available

If you do not fall into the areas covered by the Key Worker Living scheme or HomeBuy but are looking for help finding a home, try contacting your local housing association. There are over 2,000 throughout the country and they are the main providers of new social housing. They are registered with the Housing Corporation and are otherwise known as registered social landlords (RSLs).

The majority of RSLs are housing associations, but there are others that are trusts, co-operatives and companies. If they make any profit the money is put back into the organisation to help finance the building of new homes or maintain existing ones.

If you are in housing need, you should contact your local authority housing department first, as the housing associations take most of their new tenants from the local authority waiting lists. To contact the housing section of your local authority, look in the local authorities section at the front of the telephone directory.

To find out which housing associations registered with the Housing Corporation operate in your area go to its list of registered social landlords.

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Useful links

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

www.housing.org.uk – the National Housing Federation, representing independent housing associations

www.nhs.uk/accommodation – information about accommodation for NHS staff

www.teachersupport.org.uk – support and advice for teachers

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First Time Buyer Mortgages
New Property Bargains for First Time Buyers

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