Open Market HomeBuy

Open Market HomeBuy is designed for people on moderate incomes who want to own their own home. The scheme enables you to buy a suitable property on the open market with the help of an equity loan from Home2own and one of the mortgage lenders taking part in the scheme.

Firstly you qualify for the scheme and Home2own approve you. You then need to identify the house and take out a mortgage for the 75% of the open market value. You will then receive a loan for the remaining 25% of the value (12.5% from the mortgage lender and 12.5% from Home2own).

The Open Market HomeBuy mortgage lenders are Advantage, Halifax / Bank Of Scotland, Nationwide and North Yorkshire Building Society. The lender will arrange a mortgage with you through a mortgage advisor. Home2own will provide you with details of mortgage advisors that are familiar with this HomeBuy scheme.

You will be responsible for all management and maintenance costs of your new home. When you sell your home you will be required to repay the loan at 25% of the property value at the time of sale. You can also buy the 25% of equity you don't own at any time.

New Build HomeBuy

New Build HomeBuy will enable you to buy a share of a new home built with public subsidy by a housing association or other provider that receives grant from the Housing Corporation.

You will be able to buy a share ranging from 25% to 75% (this will vary from scheme to scheme), depending on what you can afford. A subsidised rent is then payable on the share of the home that you do not own. This is capped at 3% of the value of the equity you don't own. The developer retains the freehold, and will grant a long lease to you.

You will be fully responsible for all maintenance charges and outgoings, in the same way as any other homeowner. In the case of flats/apartments you are also likely to have to pay a service charge to cover any estate management services, and there is usually a sinking fund set up to cover the cost of longer-term works.

You will be able to buy further shares in your homes as your income improves.

First Time Buyers Initiative (FTBI)

FTBI is another affordable homes scheme specifically aimed at first time buyers. This scheme enables aspiring first time buyers, who cannot otherwise afford to buy a home outright, to buy a minimum of fifty per cent of a new home on a designated FTBI development. Government will hold the remaining equity, with buyers raising a loan and making mortgage payments on their portion of the home.

For the first three years of FTBI home ownership there are no other payments to make on the part of the home's equity a buyer does not own. After three years buyers will pay a charge to Government (through a HomeBuy Agent) of one per cent per annum on the equity they don't own. This charge rises by one per cent annually reaching a maximum of three per cent after five years in the property.

Because it is made affordable, FTBI is a "stepping-stone" to assist buyers into full home ownership. When owners sell their FTBI home, they will repay Government its equity. So if a buyer initially purchased seventy-five per cent it will repay the Government twenty-five per cent of the value at the time they sell.

FTBI homeowners can also choose to increase their equity share at any time by purchasing more equity from the Government at the current market value. The minimum additional purchase is ten per cent of the market value.

Other Affordable Home Ownership Initiatives

From time to time there are other low cost affordable home opportunities that arise and it is best to contact Dawn on 0845 6585 420 to find out what is available as well as keeping in touch with local authorities in the area - available on the 'Links' page.

Types of schemes available can include:

Shared Ownership Resales - As and when New Build HomeBuy Schemes become available on the market we will promote these on our property database and advise you of their availability if they fit with your location needs.

Local Authority Low Cost Sale Schemes - Within Worcestershire a number of local authorities have set up Low Cost Schemes where the price to buy a home is discounted from the full market value.

Local Authority HomeBuy Schemes - Within Herefordshire and Worcestershire a number of local authorities have teamed up with Home2own to offer further 25% equity schemes that operate similarly to the national Open Market HomeBuy Scheme.