Your landlord may offer you money to give up your council or housing association flat or house and buy a home.
How cash incentive schemes work
Your council or housing association may offer a cash incentive scheme to help you buy a home on the open market.
You need to agree to give up the flat or house you rent from the council or housing association to apply for a cash incentive payment.
Schemes have different names, such as:
- home purchase grants
- home purchase schemes
- cash incentive grants or schemes
Some schemes offer the cash incentive payment as a loan which you must repay when you sell your home. It will be registered as a charge on the home you buy.
You are more likely to be accepted by a scheme if you are downsizing - giving up a home that's too big for your needs.
Who can apply?
To be successful, you must usually:
- be a secure council tenant or an assured housing association tenant
- have no rent arrears
- be able to afford a mortgage deposit and mortgage payments
- be unable to afford to buy without financial help from the scheme
You won't qualify if you owe council tax or overpaid housing benefit or already own a property.
Cash incentive schemes are very popular.
Your landlord may have a waiting list if grant money for the year has already been allocated.
How to apply
Councils and housing associations which offer cash incentive schemes sometimes have information on their websites.
Schemes are more common in areas where there's high demand for council and housing association homes.
Amounts you can get
Amounts vary depending where you are prepared to move to and the size of the property you are giving up.
Some schemes offer as much as £80,000 to help you buy a home.
Others offer payments that range between figures of £25,000 to £44,000.
How payment is made
Your landlord arranges for the money from a cash incentive scheme to be paid to your solicitor, not directly to you.
The money is paid by the date you complete the purchase of your new home.
This means that you can't use the money as a deposit on your home.
Your landlord usually only pays the money if:
- everyone has moved out of your rented home
- your rented home is left in good condition
Homes you can buy
Cash incentive schemes allow you to buy most types of houses or flats on the open market.
You can buy a freehold or leasehold property.
Some schemes allow you to use the money to buy a shared ownership home.
The schemes won't allow you to buy:
- a home in poor condition
- a mobile home or houseboat
- a leasehold home without much time left on the lease
Right to buy
You can't apply for a cash incentive payment if you want to use the:
A new right to buy a housing association home scheme is being piloted.
These schemes are separate from cash incentive schemes.
Other cash incentive schemes to move home
Some councils and housing associations offer small grants for tenants who agree to downsize to smaller council or housing association homes.
They can also offer financial help with moving costs.
Get financial help and advice
Always get independent financial advice before you decide to buy a home.
Contact Which? for a free consultation on mortgages.
Last updated 21 February 2019 | © Shelter
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