Low cost home ownership
Low cost home ownership opportunities are open to people who cannot afford to purchase a home on the open market but want to buy their own home. Our website discusses the different opportunities available, advice on buying your own home along with important housing market updates.
What low cost home ownership opportunities are available?
Own Home Loan scheme
This scheme is run by Basingstoke and Deane Borough Council. The scheme is modelled on the Government’s existing Help to Buy: Equity Loan scheme, but the Own Home Loan scheme allows successful applicants to purchase existing homes, not simply new build properties. We will also remain in close contact with successful applicants to assist them in the purchase of their first home.
Discounted market sales
There are some properties in the borough that are for sale on the open market at a discounted price. Prospective buyers are required to meet certain criteria set out by Basingstoke and Deane Borough Council, demonstrating they are not able to afford a home suitable for their needs at full market price and have a local connection to the Basingstoke and Deane borough. Discounted market properties are advertised through the council’s Your Home emailer. Sign up to Your Home emailer where you will also receive information and advice to help you get on the housing ladder and be kept up to date on all low cost home ownership opportunities available in the borough.
When the property is sold, the same discount is passed on to the next buyer, to ensure the property remains affordable. The lease will contain the details of the discount. If you are a current owner of a discounted market home and you are looking to sell please get in touch with us via email at firstname.lastname@example.org.
First Homes are a specific kind of discounted market sale housing which is open to first time buyers (individuals or couples) who have a combined annual household income not exceeding £80,000. First Homes will be discounted by a minimum of 30% against the market value; on their first sale, will have a restriction registered on the title at HM Land Registry to ensure this discount (as a percentage of current market value) and certain other restrictions are passed on at each subsequent title transfer; and after the discount has been applied, the first sale must be at a price no higher than £250,000 (outside of Greater London). Further information on First Homes can be found on the GOV.UK website.
We are currently determining how First Homes will be implemented in our area, including additional criteria at a local level, such as a local connection requirement, whilst taking into account government guidance. Updates will be provided via our website and the council’s Your Home email. By signing up to our Your Home emailer you will also receive information and advice to help you get on the housing ladder and be kept up to date on all low cost home ownership opportunities available in the borough. Sign up to Your Home emailer. If you have any questions in relation to First Homes please get in touch with us via email at email@example.com.
Help to Buy Equity Loan scheme
This Government scheme allows you to borrow a low interest loan to put towards the cost of purchasing a new build property. The homebuilder must be registered to accept the Help to Buy equity loan. You will require a minimum of a 5% deposit and you can borrow a minimum of 5% and up to a maximum of 20% of the price of the new build property. The equity loan is interest free for five years. The Help to Buy mortgage calculator will help you to work out an estimate of the monthly payments.
To be eligible for the equity loan you need to be registered with Help to Buy and meet their eligibility criteria.
Further information about the equity loan can be found on the Help to Buy website and the equity loan homebuyers' guide on the GOV.UK website.
Help to buy shared ownership
With this Government scheme, you can buy a share of a property (between 25% and 75% of the property’s full market value) and pay rent to a landlord, usually a housing association, on the remaining share. You can buy a home through shared ownership if your household income is £80,000 or less a year and you cannot afford all the deposit and mortgage payments for a home that meets your needs. The Help to Buy mortgage calculator will help you to work out an estimate of the monthly payments.
To be eligible you need to be registered with Help to Buy and meet their eligibility criteria.
Once you have sourced a property you want to buy, Help to Buy refer you to a mortgage advisor who will assess your income and outgoings and assess the percentage share you can afford. Once you have bought your home you can purchase more shares in the property, which is known as ‘stair casing’. All shared ownership properties are sold as leasehold.
You can buy a new build property or an existing property for sale through a registered provider’s shared ownership resale scheme.
The 95% mortgage guarantee scheme
As part of the 2021 budget, the Government has introduced 95% mortgages for buyers with 5% deposits on homes up to £600,000. This scheme began on 19 April 2021 and will be available on mortgages taken out until 31 December 2022. These mortgages will be available to first time buyers and current homeowners, with the Government offering lenders the guarantee they need to provide mortgages that cover the other 95%, subject to the usual affordability checks.
Advice on buying your own home
Buying your own home is a big purchase and there are several things you will need to consider and understand before starting the process. These factors are explained below in the usual order you will need to consider them. Find out more details on the Money Helper website.
Saving for a deposit
The deposit amount is based on the price of the property you are looking to purchase. The minimum deposit required is 5% although saving more than 5% will give you access to a wider range of cheaper mortgages available on the market and a lower interest rate.
For example, if you want to buy a home costing £200,000, you’ll need to save at least £10,000 which is a 5% deposit. Once you know how much you need to save, you should think about where you want to save your deposit and how much interest you will earn.
You may wish to consider opening a Lifetime ISA (LISA). There is a maximum amount you can put into the LISA each year along with a maximum boost on your savings. If you are a first-time buyer under 40 you could receive a 25% boost on your savings. Find out more about LISAs on the Money Helper website.
What is a mortgage?
A mortgage is a loan taken out to buy a property with a term of approximately 25 years, although the term can be shorter or longer depending on your circumstances. The loan is secured against the value of your home until your mortgage is paid off.
Finding a mortgage
You can apply direct to a bank or building society, or you may choose to use an independent mortgage advisor. The lender will provide you with a mortgage in principle estimating how much they are prepared to lend to you. A mortgage in principle is also known as a decision in principle.
How do lenders assess affordability?
The most lenders usually allow you to borrow is four and a half times your annual income. Lenders will conduct an affordability assessment where your income and outgoings are assessed to ensure you can afford the monthly repayments even if interest rates rise or your circumstances change. Use the mortgage affordability calculator on the Money Helper website to calculate an estimate of the amount you can afford to borrow.
The lender will also conduct a credit check with a credit reference agency. Find out more about how to check your credit score and how to improve your credit score on the Money Helper website.
Properties available for purchase are advertised on Rightmove and Zoopla. Viewings are arranged, usually through the advertised estate agent and once you have found a property you like and can afford, you can make an offer.
Solicitor and Survey
Once you have sourced a property and your offer has been accepted, you will need to find a solicitor or conveyancer to handle the legal work around the purchase of your home. You will need to have a survey on the property conducted by a Royal Institution of Chartered Surveyor company which will value the property and check for any problems. Further information about different types of surveys can be found on the Money Helper website.
Exchange of contracts
After the survey, you will finalise your mortgage with your lender. If there are no problems you and the seller will then be ready for your solicitors to exchange contracts, committing you to your purchase. This is when you will need to have buildings insurance in place to cover the structure of your home.
Upon completion, the property is officially yours. Your solicitor will register the transfer of ownership with the Land Registry. At this stage you will need to pay your solicitor’s bill and stamp duty.
Other costs of purchasing your own home
Apart from your monthly mortgage payments, there are others costs when buying a property. These include:
• survey costs and fees for a valuation of the property
• solicitor or conveyancer fees (this often includes extra costs, such as search and Land Registry fees)
• mortgage arrangement fees
• Stamp Duty Land Tax
• buildings insurance
• removal and moving in costs
• initial furnishing and decorating costs
Stamp Duty Land Tax
Stamp Duty Land Tax must be paid if you buy a property over a certain price. If you buy a residential property for less than £250,000, prior to 30 September 2021 you do not need to pay stamp duty. After 1 October 2021 the threshold reduces to £125,000. Stamp duty is paid upon completion of your property purchase. The amount of tax will vary depending on the purchase price of your property. To calculate your Stamp Duty Land Tax use the calculator on the GOV.UK website
For first time buyers you do not need to pay stamp duty if your property purchase price is below £500,000.
Further information and useful websites
Low cost home ownership schemes
Information about the different low cost home ownership schemes available can be found on the Own Your Home website.
Buying your own home
The government has a range of useful websites with advice on buying your own home. The Money Helper website discusses all aspects of purchasing your own home, for first time buyers and those that are not, along with all available schemes to help with your purchase. For first time buyers, there is a helpful guide on the Money Helper Website explaining the different terms used when purchasing your first home.
Shared Ownership shares
There is a new model for shared ownership which has amended the share you can purchase. Once properties are for sale under the new model, you can purchase a minimum share of 10% up to a maximum share of 75%. A limited number of these homes will be available in 2021, with more properties being available in 2022.
How can I be kept up to date?
Sign up to our Your Home emailer to be informed of the discounted market properties for sale in the borough. You will also receive information and advice to help you get on the housing ladder and be kept up to date on all low cost home ownership opportunities available in the borough.
Help to buy event
We run our own help to buy event where you can receive information and ask questions relating to low cost home ownership options. Sign up to our Your Home emailer to be kept informed about the next event date.
If you have an enquiry about any low cost home ownership opportunities, please email the Housing Strategy Team