First Time Buyer

• Directory of HomeBuy Agents and Housing Providers
• Glossary of terms

Glossary

New Build HomeBuy

Housing Associations are offering new homes throughout the country. These are either part of a shared tenure development, where properties are available on the open market, for social rent, or solely for people who apply to the HomeBuy scheme. Method: Contact your local HomeBuy agent for more information.

New build developments

There are many new properties available, which can either be purchased off-plan or when they are finished. New builds are often very energy-efficient and developers are currently offering great incentives and heavily reduced prices. Method: Register with local estate agents and contact developers directly for new build homes.

Privately owned properties

The majority of homes that are for sale are offered by private homeowners, investors or landlords. These properties give buyers the most choice and are made up of properties from period to ex-local authority, and from studios to mansions. Method: Contact estate agents in the area and register on internet property portals.

Rent to Homebuy

A selection of New Build HomeBuy properties are available to ‘try before you buy’. You can become a tenant on a discounted rent for up to three years. After which time you can decide whether to buy a percentage or walk away. You need a household income of under £60,000 to apply. Method: Contact your local HomeBuy agent for more information.

Shared Ownership

This scheme gives buyers the chance to purchase as little as a 25% share in the property and pay the rest in the form of subsidised rent. In the majority of cases, there is the opportunity to own the rest of the property outright by a method known as ‘staircasing’. This way of getting on to the ladder is usually much more cost effective for first time buyers who can’t afford to buy on the open market. Method: Contact your local HomeBuy agent for more information.

HomeBuy Direct

An equity loan, which can be used as a deposit, is available on certain developments. The loan is interest-free for the first five years and the buyer can borrow up to 30% of the purchase price. The scheme was launched earlier this month, and 130 major developers are participating. Buyers have a choice of 18,000 properties. Method: Contact your local HomeBuy agent for more information.

Private initiatives

In the current downturn it is important to shop around. Developers are offering a variety of incentives if you buy their stock. These include cash back for a deposit, giving you a loan to help with costs or paying your mortgage or bills for a period of time. Method: Contact developers directly, research using the internet and contact estate agents in the area.

MyChoice HomeBuy

This scheme allows you to borrow 15%-50% of the property price as an equity loan from one of eight housing associations on a low interest rate. The remainder is funded by a typical mortgage. On selling the property the loan provider will be entitled to a share of any increase in price. No more funds will be allocated in 2009, but there are still some properties available through the scheme. Method: Contact your local HomeBuy agent for more information.

Open Market HomeBuy: Ownhome

Places for People and The Co-operative Bank give buyers the chance to buy without a deposit. Places for People lends up to 40% of the value of the property in the form of an equity loan. The loan is interest-free for five years, after which a fixed rate of 1.75% applies, rising to 3.75% after 10 years. The rest is paid for by one of the Co-operative Bank mortgages. Method: Contact your local HomeBuy agent or Ownhome (tel: 0845 607 0110) for more information

Equity Loan

This is an additional loan designed to improve people’s purchasing power by supplementing a conventional mortgage. There are various schemes that offer equity loans, with different clauses. Some are based on interest repayments or paying back a percentage of the profit if the value of the property increases over time.

First Time Buyers Initiative

This applies to new build homes and enables you to have 100% ownership of your home, by taking out an affordable mortgage for a minimum of 50% of the full purchase price through a conventional lender. The government then provides assistance to buy up to the full purchase price.

HomeBuy Agent

HBAs are appointed housing associations who provide a ‘one-stop-shop’ and point of contact for affordable housing options in a given area in England. They also handle the entire application process for the government’s HomeBuy products. Please see our directory of HomeBuy agents.

Staircasing

This applies to New Build HomeBuy schemes, and occurs when the resident tops up the number of shares they own in their part-owned, part-rented home, until they own the maximum share or own the property outright.