Affordable home ownership
Rushcliffe is an area with high average property prices and, like most parts of the UK, prices have risen faster than average incomes in recent years. This means that many people struggle to buy a home suitable for their family. Although the availability of mortgages has improved, in April 2015, the average loan to value ratio for first time buyers was still 83%. This means the average first time buyer would need to find a deposit of 17% of the property’s value, which in Rushcliffe would be around £27,000. It is not surprising, then, that the age of first-time buyers is rising, and this has knock-on effects right through the housing market.
There are a number of schemes to help first time buyers to get onto the property ladder, and these are all managed by Help to Buy Midlands. Full details are available on their website, or buying calling 0345 850 2050.
If you are a first time buyer, you can use this handy online guide, provided by Which?, to guide you through the process of buying a home.
Help to Buy shared ownership
Shared ownership does not mean you have to share your home with someone else. It means that you purchase a share of a property (normally 25% or 50%) and pay rent on the remaining share to a housing association. This means you need a smaller mortgage and therefore a smaller deposit. The rent you pay is controlled, so you can be confident it will not rise excessively. Over time, you can purchase additional shares until you own the property outright and stop paying rent. (In some rural areas the share you can buy may be capped at 80%).
Most properties for shared ownership will become available on new housing developments, although older shared ownership properties occasionally become available. All of these properties are advertised by Help to Buy Midlands. Just click on Find a Home to see what is available. You can check whether you are eligible and apply online, or call 0345 850 2050 for more information.
Remember that you can also look at properties in other areas – you might find the perfect place just in a neighbouring authority. There are sometimes criteria to ensure that local people have the first call on new housing, but it is always worth enquiring whether these apply.
Help to Buy equity loan
Help to Buy Equity Loans is a government scheme to help people purchase a brand new property. Again, you need to save at least a 5% deposit (although you can have more). You then take out a mortgage for at least 75% of the home's value and borrow the remaining value (up to 20%) in an equity loan from the government. Unlike a mortgage, you do not pay interest on the equity loans, and you do not have to pay them off until you sell your home in the future (although you can do if you wish). The equity loans cost nothing for the first five years; after this, there is a small charge which increases year on year until they are repaid.
You do not have to be a first time buyer to use Help to Buy, but you must live in the home you purchase, and it must be the only home you own. You cannot use the scheme to buy a second home, or a home to rent out, or in order to rent out your existing home.
You can find more information on Help to Buy and register for the scheme on the Help to Buy Midlands website, or you can call them on 0345 850 2050.
Help to Buy: Mortgage Guarantee
Help to Buy: Mortgage Guarantee is a government-backed scheme, allowing you to borrow more and more affordably to buy a home. You need a minimum 5% deposit. The Government provides a mortgage guarantee, which allows the lender to offer you a mortgage on much more preferable terms than a standard 95% mortgage. The Council does not have any involvement in this scheme.
You can buy any home, existing or new, up to a value of £600,000, using this guarantee. Certain terms and conditions apply, and you can find out more on the Help to Buy website. To apply, you should contact one of the mortgage lenders listed on the site to discuss what they may be able to offer you.