Shared equity schemes – What are they and what is available to you?

Help To Buy

This is an ’equity loan scheme’ where the Government stumps up interest-free loans of up to 20% of the property’s value, allowing you to buy with a deposit of only 5%. The scheme only applies to new-build homes but is open to all – not limited to first-time buyers.

The maximum equity loan the Government will grant is £120,000 and the maximum purchase price is £600,000. You need to raise a mortgage for the remaining 75%.

The loan is interest-free for 5 years then from year 6 you start to pay interest on the original loan amount at 1.75% rising each subsequent year.

The home will be in your name, so you’re free to sell at any time, but the loan must be repaid when the house is sold or at the end of your mortgage period.

You then need to repay the Government 20% of the sale price – which may be higher higher than the amount originally lent if house prices have risen in the meantime.

Or you can opt to pay back some or all of your loan earlier without selling your home. Apply via participating house builders.

Shared Ownership and Key Worker Assistance

To keep communities functioning, Housing Associations sometimes have schemes to allow key workers to get onto the first rung of the ladder.

Shared Ownership allows you to buy a % share of the property, for example 50% or 75% and rent the remaining share at a subsidised rent. Then when your finances.are ready, you can apply to buy the rest, or do it in ‘steps’ hence the term ‘staircasing’.

In some cases ( but not all) there may be work related criteria you need to meet to be eligible, for example:-

  • Nurses and other NHS clinical workers.
  • Teachers in schools, further education and sixth form colleges.
  • Police officers, and some civilian staff in some police forces.
  • Prison and probation service workers.
  • Social workers and educational psychologists
  • Staff employed by local councils.
  • Full-time fire officers, and retained fire fighters.
  • Bus drivers.

Rising house prices have resulted in many workers in the public sector being priced out of the market, the above options are designed to help you get on the property ladder regardless of your situation.