Government HomeBuy Guide

1. How 'HomeBuy' works

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As a result of significant house price rises over recent years many individuals have found that they don't earn enough money to purchase their own home. The government has recognised this and has introduced a homebuyer's initiative called 'HomeBuy'.

This Government's HomeBuy scheme allows potential purchasers to buy a stake in their desired property using a combination of their own funds (the deposit), and a mortgage. The remaining stake in the property is funded and owned in different ways depending on the chosen scheme.

The Government's HomeBuy scheme offers three types of product as follows:

• 'Social HomeBuy' - A form of shared ownership, this scheme allows council and housing association tenants to buy a minimum 25% share in their rented home. Individuals choosing this option are required to pay an initial rental charge on the remaining equity.
• 'Open Market HomeBuy' - Providing an equity loan of up to 50% of the desired property's value, this scheme helps individuals buy a property on the open market. Interest is payable on the equity loan and the loan providers share in any capital gain the property may experience.
• 'New Build HomeBuy' - A form of shared equity, this scheme helps individuals purchase a new-build property from participating property developers. The individual is then required to pay rent to the developer on the part of the property they don't own.

2. Scheme eligibility

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The Government's HomeBuy scheme is open to a variety of households that meet certain pre-determined criteria. In order to be eligible applicants must:

• Have a household income of £60,000 or less per year.
• And be either:
  • A first time buyer.
  • A previous home owner who can't currently afford to buy.
  • A 'Key worker' (e.g. a nurse, police officer or a teacher).
  • A housing association or council tenant.

3. How to apply

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If you are interested in applying for any of the Government run HomeBuy schemes, arrange a meeting with a mortgage consultant. The consultant will be able to discuss the various options available to you and put you in touch with a HomeBuy agent.

The HomeBuy agent will assess your eligibility, progress your HomeBuy application and help identify appropriate schemes in your area.

Your mortgage consultant will also be able to recommend a suitable mortgage product from the options available and progress all of the appropriate mortgage paperwork.