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Help to Buy shared ownership

This content applies to England

How the Help to Buy shared ownership (previously NewBuild HomeBuy) schemes work, eligibility and how to apply.

Under these shared ownership schemes, the purchaser of a new build or renovated property buys part of the property with a mortgage and rents the remaining share.

The schemes

There are two Help to Buy shared ownership schemes:

  • new build homes
  • resales

These schemes operate in the same way as the former NewBuild HomeBuy scheme. The information on this page relates to both the former and the currently available schemes.

How the scheme works

The minimum share the applicant can buy is 25 per cent of the property and the maximum will usually be 75 per cent. The remaining share will be owned by a private registered provider of social housing(PRPSH). The applicant pays rent on the share owned by the PRPSH. The rent is designed to be affordable. Over time the owner-occupier can buy additional shares up to 100 per cent of their home. This process is known as ‘staircasing’ (see the page Staircasing for further information).

There are variations in how the schemes operate in different areas. For full details the applicant must check with the Help to Buy agent responsible for the relevant area. Further details are available from Gov.uk.

Who can apply

Applicants must be earning less than £60,000 a year and must be unable to buy a home on the open market. They must be able to raise funds (ie obtain a mortgage from a qualifying lender or use savings) for the share of the property they are to buy and be able to afford to pay the rent for the remaining share.

Eligible categories of people include:

  • first-time buyers
  • former homeowners who cannot now afford to buy without help
  • tenants of registered providers
  • key workers.

In certain areas, applications may also be accepted from the following:

  • people living with parents or relatives
  • people living in private rented accommodation
  • people who need to move for work reasons
  • homeless people living in temporary accommodation (see also information below under 'Temporary tenants').

Applicants may be prioritised according to locally determined factors such as housing need, where the applicant lives, and the social need for certain employees in that area (eg public sector workers who are not key workers). Priority may be given to local authority and PRPSH tenants who would vacate social rented accommodation if they bought a home through a Help to Buy shared ownership scheme, or to eligible key workers who meet the key worker eligibility rules for Key Worker Living programme (see the page on Key Worker Living programme for information on who is a key worker).

Joint applications

The maximum number of people able to jointly buy a home is three or four depending on the lenders' criteria.

Who cannot apply

Tenants occupying their property on a temporary basis are not eligible to apply, unless they are on the local authority's housing waiting list and have been nominated by the local authority as being in housing need.

Types of property available

Only certain new build or renovated properties can be purchased through the scheme. The developer will usually be an PRPSH.

How to apply

HomeBuy agents deal with the applications and register the applicant’s interest so that s/he can receive information about the schemes, eligibility criteria and detailed information relevant to the area(s) of interest. Potential applicants should contact their local HomeBuy agent to register their interest in applying.

Security of tenure

A person who buys a share in a newly built or renovated home through a Help to Buy shared ownership scheme (or a predecessor scheme)is a combination of an assured tenant and long leaseholder (see the section on Assured tenancies for more information). The PRPSH retains the freehold of the property. See the Home ownership section for information on the rights and responsibilities of owner-occupiers.

Selling the home

The owner-occupier can sell her/his property at any time but must inform the landlord of her/his decision to sell in writing.

Depending on the clauses contained in the lease, the landlord may have the right to buy the property back or the right to nominate another household for the repurchase. The owner-occupier can either just sell the share s/he owns or s/he can staircase her/his ownership to 100 per cent (see the page on Staircasing) and then sell it.

The property is sold at market value and the owner-occupier will benefit from any additional equity in the share s/he owns.

Alterations or improvements

If the owner-occupier wishes to improve the home or make structural alterations to it, s/he must request the PRPSH’s prior written agreement.

Shared ownership of existing property

The Help to Buy shared ownership - resales scheme allows people to buy an existing shared ownership property. The minimum share of a property that can be purchased under this scheme is the share owned by the seller. Otherwise the same conditions apply as for the Help to Buy shared ownership - new build homes scheme. Applicants for the Help to Buy shared ownership - resales scheme should contact the Help to Buy agent for their area.

Wales

The information on this page applies only to England. Go to Shelter Cymru for information relating to Wales.

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