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HomeBuy in Wales

This content applies to Wales

How the HomeBuy shared equity scheme operates in Wales, eligibility and how to apply.

People seeking low cost home ownership in Wales can also apply to the Help to Buy mortgage guarantee scheme which covers the whole of the UK from October 2013. See the page Help to Buy mortgage guarantee scheme for more information.

How the scheme works

HomeBuy helps people to buy a home on the open market by providing an equity loan to cover a portion of the purchase price. In Wales, applicants will usually need to obtain a mortgage for 70 per cent of the purchase price of the property, although in certain rural areas this is reduced to 50 per cent. A participating RSL will then provide a loan to cover the remainder of the amount.

Who can apply?

The following groups of people are eligible to apply to the scheme:

  • existing tenants of RSLs and local authorities
  • those who have applied for an allocation of local authority or RSL accommodation, and are nominated by the local authority as being in housing need.

Temporary tenants

Tenants occupying the property on a temporary basis are not eligible to apply.

Joint applications

Joint applications of no more than four people are allowed under the scheme as long as their joint income and savings do not enable them to buy a home outright.

Additional criteria

In addition, applicants need to meet the following criteria:

  • they will need to be able to obtain a mortgage for their share of the property from a qualifying lender, eg a bank, building society or insurance company (some other lenders may also be considered acceptable, but the applicant would need to check first with the RSL operating the HomeBuy scheme)
  • they must be unable to buy a home without help from the HomeBuy scheme
  • if they are a local authority or RSL tenant, they must not have rent arrears or be otherwise in breach of their tenancy agreement
  • if they currently own or part-own a property, they must be in housing need to be eligible for HomeBuy - they would also need to sell their current property at the same time as buying a property through the scheme
  • they cannot have received housing benefit in the 12 months before their application for HomeBuy
  • in certain rural areas, applicants may have to meet additional criteria, eg they may need to have been resident in the area for a certain length of time.

Types of property available

The HomeBuy scheme is only available in specific areas, usually those where there is a shortage of social housing. Information about which areas in Wales offer the HomeBuy scheme can be obtained from one of the RSLs that operate the scheme: details are available from local authorities or from the National Assembly for Wales.

A property bought under the HomeBuy scheme in Wales must:

  • be within the published price limits of the scheme; price limits vary depending on the applicant's circumstances (information about price limits can be obtained from the RSL operating the scheme)
  • be of a suitable size for the applicant, although properties one bedroom larger than the applicant requires should also be acceptable
  • be a residential property (ie have no commercial use)
  • be on sale with vacant possession (ie without a sitting tenant) and be fit to live in immediately, or if a new property under construction, the sale price must be fixed and contracts must be able to be exchanged within six months
  • be acceptable for mortgage purposes and be in a reasonable state of repair as shown by a homebuyer's survey or valuation report
  • if leasehold, have at least 60 years remaining on the lease
  • be the applicant's sole residence
  • be within any of the areas designated by the relevant local authority.

Excluded properties

The following types of property are not available to buy through the HomeBuy scheme:

  • properties used for commercial purposes
  • most caravans, mobile homes and houseboats
  • properties offered to the applicant by a local authority or RSL at a discount, eg under a shared ownership scheme
  • properties occupied by sitting tenants
  • properties owned or part-owned by the applicant's partner, family member or business associate.

How to apply

Potential applicants should obtain an application form directly from the RSL operating the scheme in the relevant area. Details of RSLs operating the scheme are available from the local authority or the National Assembly for Wales.

Selection for scheme

The RSL operating the scheme will consider the applicants' circumstances before deciding whether to accept them for the scheme. The RSL will also consider the local authority's need for social rented housing in the area. In practice, this will usually mean that the local authority is able to identify someone on its waiting list who needs the property that will be freed up.

Security of tenure

Applicants who purchase a property with a HomeBuy loan will be owner-occupiers and will own either the freehold or the leasehold. See the Home ownership section for information on the rights and responsibilities of owner-occupiers. See the page HomeBuy and Help to Buy: repossession for information on repossession of HomeBuy properties.

Selling the home

When selling a property purchased through HomeBuy in Wales, the owner-occupier must repay the landlord's share in the property as it is valued at the time of the sale. For example, if the owner-occupier owns 70 per cent of the property, then they will need to repay 30 per cent of the market value of the home at that time to the local authority or RSL.The occupier must pay the valuation fee.

Alterations or improvements

The value of any structural alteretions or improvements the occupier has made will be discounted, provided the RSL gave written permission for the improvements to be carried out.

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