If your dream is still to buy a home one day but you need help getting on the property ladder, a shared ownership scheme is a possibility. Many council tenants would love to buy the homes they live in, but simply can’t afford to. Tenants now have the opportunity under the Social Homebuy Scheme. By using one of the Government’s affordable housing schemes, tenants can purchase a share of as little as ten per cent in a property.
Council tenants, who want to become homeowners for the first time, now have access to several financial products designed to give maximum help. Under the Social Homebuy scheme, tenants can either buy outright a property they are renting or opt to own a share of it. Part-owners arrange a mortgage on the portion of the property they can afford and pay a subsidised rent to a housing association or local authority on the remainder. For most schemes, shares normally start at 25 per cent of the value of the property.
To make it even more affordable, if tenants are purchasing a property outright, they can also claim a discount on its value up to a maximum of £16,000. A purchaser of a 50 per cent share, meanwhile, would get a discount of £8,000. One drawback to the scheme, however, is that if the former tenants sell within five years, then the discount has to be paid back. Also, to be eligible for Social Homebuy, tenants must have lived in their home for five years if they joined their council or housing association before January 2005 and for two years if they joined after that date.
Notting Hill Home Ownership is one of the housing associations which offer Social Homebuy. It’s chief executive, Kate Davies said, “Tenants who wish to move out of social accommodation and on to the property ladder need tailored advice and information so they can evaluate their realistic buying options and consider the next steps. There are numerous ways for people to get out of the renting rut. Encouraging mobility among existing social tenants will also free up subsidised social housing for those who have a current requirement.”
Shared ownership buyers need to have a minimum of £3,500 to pay for legal fees and other costs such as valuation and survey charges but can get a 100 per cent mortgage on the rest. Individuals who buy their homes through a shared ownership scheme will be exempt from stamp duty until they own 80 per cent of their home.
If tenants are looking for a bigger home or want to move to a different area, then the Open Market Homebuy or New Build Homebuy schemes could assist you.
Editor Simon Weston-www.myfirsthomeltd.co.uk:
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