Social HomeBuy
This content applies to England only.
Housing laws vary between England and Scotland. Get advice relating to Scotland
HomeBuy gives some social housing tenants the chance to buy a share of their current home.
Who is eligible?
You may be considered for this scheme if you are a council or housing association tenant and your household income is less than £60,000 per year. You must be a secure council tenant or an assured housing association tenant to qualify, and have been a social housing tenant for at least five years. You'll need to check if your landlord offers the scheme (not all landlords do).
You will not be eligible to buy your property if:
- you are facing legal action for: antisocial behaviour, breaking your tenancy agreement or rent arrears
- you are going through bankruptcy proceedings
- your landlord has a court order to evict you.
What homes are included?
Council or housing association tenants may be able to buy a share in the home they are already renting, or sometimes their landlord may offer them an alternative home to buy.
How does it work?
This is a shared ownership scheme – you buy a share of the property from a council or housing association and the association keeps hold of the remaining share. You pay rent on the landlord’s share. You have to buy a minimum share of 25 per cent of your home, but can buy anything up to a 100 per cent share in the property. You can also increase your share over time – ‘staircasing’ is allowed.
The landlord owns any remaining share of the property and will charge you rent on this share of up to 3 per cent per year. For example, if the value of the landlord’s share of the property is £100,000, the charge for the year will be 3 per cent of this, or £3,000. You will have to pay the landlord £250 per month in rent.
You will also be given a discount on the purchase price of the property. Under this scheme you become a leaseholder. The council or housing association keeps the freehold as well as a share in the property.
As well as rent, you will also have to pay the mortgage on your share of the property. It is important to be aware that people who buy leasehold properties have to pay service charges for repairs and improvements. You will also have to pay for all the other costs of owning a home.
Discounts
When you buy your home under a Social HomeBuy scheme, you will be entitled to a discount of between £9,000 and £16,000 depending on the location of the property. The discount is calculated as a proportion of the size of the share you are buying. For example, if you are buying a 25 per cent share and the discount for the whole property would be £16,000, you will receive a discount of £4,000. Further discounts will not be available if you increase your share in the property later on.
What if I want to sell?
When you come to sell the property, the landlord will have the option to buy back the property at the market value. The landlord may also nominate another buyer to do so instead. If the landlord decides not to buy the property or nominate anyone, you can sell it on the open market.
If you sell the property within five years, you will have to repay part of the discount you received. The amount you need to repay will depend on how long you have owned the property before you sell it. The longer you stay, the less you will pay.
You will be entitled to a share of the proceeds of the sale (the amount paid for the property less the costs of selling), and your landlord will also be entitled to a share.
Want to know more?
For more information, see our page about home ownership schemes. To find out more about the schemes, properties available in your area or to apply, contact your local HomeBuy agent, or First Steps agent if you live in London.
You may also want to consider if you could buy your council home using the ‘right to buy’ or your housing association home using the ‘right to acquire’.
Where can I get advice?
It is important to get independent financial advice before you decide to go ahead with any property purchase. This will help you choose the best scheme for you and work out what you can realistically afford. Independent financial advisers should be registered with the Financial Services Authority. They usually charge you for their services.
Alternatively, your local advice centre may be able to help you. Use our directory to find one. Council or housing association tenants may be able to apply to buy a share in the home they are already renting, or sometimes on different homes offered by their landlord.
