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?

For a summary of the low cost home ownership options within Basingstoke and Deane Borough Council, please see this graphic. An explanation of the different affordable home ownership options within the borough is as follows:

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.

Find out more information and how to apply to the Own Home Loan Scheme

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 low cost home ownership register.

Sign up to the Low cost home ownership register 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 lcho@basingstoke.gov.uk.

First Homes
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.

The council has determined how First Homes will be implemented in our borough, taking into account government guidance. To be eligible to purchase a First Home in our borough you will need to have a combined annual household income less than £80,000, have a mortgage to fund at least 50% of the discounted purchase price along with a local connection to the Basingstoke and Deane borough.

Local connection is defined as:

• normal residence in the borough for the previous 12 months before your expression of interest in the scheme, or for a total period of three out of the previous five years before your expression of interest; or
• employment for 16+ hours a week on a permanent contract within the borough for the previous six months before your expression of interest in the scheme; or
• close family associations within the borough and a requirement to move to the borough to offer or receive care and/or support.

Key workers do not need to adhere to the six month employment qualifying period and are defined as:

• Those working in health and social care, including health and life sciences.
  
• Those working in education and childcare.
  
• Those working in key public services.
  
• Those working in local and national government.
• Those working in the foods and necessary goods industry.
  
• Those working in public safety and national security.
  
• Those working in transport and border control.
  
• Those working in utilities, communication and financial services.
  
• Any other occupation not in the categories above which provides an essential service to the Basingstoke and Deane Borough or wider society, to be demonstrated by the prospective purchaser and determined by the council.

The council’s First Homes Interim Policy Statement dated December 2021 covers our interim eligibility criteria in more detail. The interim eligibility criteria is in place for First Homes to give priority to local residents until a new policy is introduced as part of the borough’s Local Plan Update.

When First Homes properties are available, they will be advertised via our Low Cost Home Ownership Register 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. If you have any questions in relation to First Homes please get in touch with us via email at lcho@basingstoke.gov.uk

Help to buy shared ownership

With this Government scheme, you can buy a share of a property (between 10% 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. You must also be a first time buyer, used to own a home but now cannot afford to buy a new one, you currently own a home and want to move but cannot afford a new home suitable for your needs, you are forming a new household (for example after a relationship breakdown) or you are an existing shared owner and want to move.

The current model of shared ownership with the initial purchase share starting at 25% will continue until 2023. There is a new model of shared ownership which reduces the initial share from 25% to 10% and this should be available to purchase from 2022 (there were a limited number of properties available in 2021). Therefore, there will be a transition period in which both the former and new shared ownership models will be available. It is important to check which model you are applying for. Under the new shared ownership model there is a 10 year repair during which the shared owner receives support from their landlord to pay for essential repairs and a new 1% gradual stair casing model has been introduced.

Sign up to the Low cost home ownership register where you can find shared ownership properties for sale in the borough.

Once you have sourced a property you want to buy, a mortgage advisor 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’. Under the new shared ownership model, a 1% gradual stair casing model has been introduced. This means shared owners can staircase in smaller instalments of as little as 1%, down from 10%. 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.

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.

Viewing properties
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.

Completion
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 about Stamp Duty Land Tax can be found on the GOV.UK website.

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.

Complete a short questionnaire on the Own Your Home website to help you decide which scheme is right for you.

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.

Further details of all the factors you need to consider when buying your own home can be found in the how to buy a home booklet on the GOV.UK website

News

Shared Ownership shares
The current model of shared ownership with the initial purchase share starting at 25% will continue until 2023. There is a new model of shared ownership which reduces the initial share from 25% to 10% and this should be available to purchase from 2022 (there were a limited number of properties available in 2021). Therefore, there will be a transition period in which both the former and new shared ownership models will be available. It is important to check which model you are applying for. Under the new shared ownership model there is a 10 year repair during which the shared owner receives support from their landlord to pay for essential repairs and a new 1% gradual staircasing model has been introduced. This means shared owners can staircase in smaller instalments of as little as 1%, down from 10%.

How can I be kept up to date?

Sign up to the Low cost home ownership register 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 the Low cost home ownership register to be kept informed about the next event date.