welcome to home2you

2. WHAT ARE THE DIFFERENT TYPES OF LOW COST HOME OWNERSHIP?

There are three different types of "products" currently

• 1. New Build Home Buy (formerly known as "Shared Ownership)
• 2. Open Market HomeBuy (formerly known as HomeBuy)
• 3. Social HomeBuy

1. New Build Home Buy (formerly known as "Shared Ownership)

These are newly built properties developed by a Housing Association or developer which have been specifically built for people to part buy/part rent. This "sharing" of ownership with the Housing Association is defined on a percentage basis. Therefore if you wish to purchase 50% of the property you will need to be able to secure a mortgage for 50% of the open market value and also pay a small rent charge on the remaining 50%.

An example would be:-

Typical Illustration, 2 bedroom house

You can purchase a minimum 25% share and in time "staircase" up to 100% by purchasing more equity (share) of the property, so in time you can own the property outright. If at any time you want to sell the property you would retain the percentage of the sale price equal to the percentage share you own. This means that in a rising market you share the appreciation in value with the Housing Association and in a falling market you share the depreciation in value with the Housing Association.

In Lincolnshire and Rutland it is anticipated that there will be properties built in all local authority areas.

2. OPEN MARKET HOMEBUY PRODUCTS

Open Market HomeBuy is a low-cost government-backed home-ownership programme that aims to help people to secure 100% funding of the value of their first home. It is a flexible equity loan scheme designed to help households earning up to a maximum household income of £60,000 (depending on area) a year to buy their own homes on the open market.

There are two Open Market HomeBuy products, which are designed specifically to help local authority and housing association tenants, key workers and others who are not able to afford to buy a suitable home in an area where they live or work without assistance. Both products are available throughout England and have been designed to suit a wide range of personal circumstances.

Key features of Open Market HomeBuy

• You can choose between two distinct products, MyChoiceHomeBuy and Ownhome;
• You can borrow between 15% and 50% of the value of the property at a low, or no, interest rate;
• If you qualify for a mortgage of £110,000, for example, you could potentially purchase a property worth up to the current national house price average of £220,000;
• If you took up MyChoiceHomeBuy, you could get your conventional mortgage from a range of lenders; and
• If you opted for the Ownhome product, you would have a five-year interest-free period on your equity loan.

For both products, when repaying the equity loans, you would have to share any increase in the property’s value with the equity loan provider.

OWNHOME

Ownhome is provided by a partnership between Places for People and the Co-operative Bank and is part-funded by the Government. Places for People is an equity loan provider in its own right.

You can find out more about Ownhome at www.ownhome.co.uk or by calling its information line on 0845 607 0110

Useful links:

• Ownhome overview (.pdf)

MY CHOICE HOMEBUY

MyChoiceHomeBuy is part-funded by the Government and is offered by eight housing associations, each of which is an equity loan provider in its own right.

Metropolitan Home Ownership (www.mho.co.uk, tel 0845 602 7184);

Useful links:

• My Choice Home Buy overview (.pdf)
• Properties you can buy (.pdf)
• Financial questions (.pdf)

3. Social HomeBuy

This is a scheme which allows certain tenants of certain Housing Associations to purchase their existing home on a pro-rata basis.

In Lincolnshire this scheme is currently unavailable, however, further details can be found by contacting Home2You

4. FTBI (First Time Buyers Initiative)