Want to buy

Affordable Home Ownership Options:

Help to Buy

The Government created a range of Help to Buy products to assist those who otherwise wouldn't be able to get a foot on or up the housing ladder.

Whether you are looking to get onto the housing ladder or move up it, there are a number of Help to Buy products designed to make buying a home more affordable, including:

Shared ownership

How does it work:

If outright purchase is not an option for you, this scheme offers an alternative to renting. You can buy an initial share in a new home that you can afford, helping you into home ownership in manageable stages.

The Housing Association or Registered Provider will offer initial shares usually between 10% - 75% of the full purchase price. You pay a subsidised rent on the remaining share that the Housing Association or Registered Provider still own. The combined monthly cost of mortgage and rent will normally be less than if you were purchasing the property outright.

In the future you can simply sell your share for its value at the time or alternatively you can purchase further shares in your home.

With most properties you are eventually able to own the property outright if you wish to, although there are some restrictions on rural schemes.

Who can apply:

You can buy a home through shared ownership if both of the following apply:

• your household income is £80,000 a year or less (£90,000 a year or less in London)
• you cannot afford all of the deposit and mortgage payments for a home that meets your
  needs

One of the following must also be true:

• you’re a first-time buyer
• you used to own a home, but cannot afford to buy one now
• you own a home and want to move but cannot afford a new home suitable for your needs
• you’re forming a new household - for example, after a relationship breakdown
• you’re an existing shared owner and want to move

If you own a home:

When you buy a shared ownership home, you must have:

• formally accepted an offer for the sale of your current home (called ‘sold subject to contract’ or ‘STC’)a
• memorandum of sale

You must have completed the sale of your home on or before the date you complete your shared ownership purchase.

Older people:

If you’re aged 55 or over at the time of buying the home, you can buy up to a 75% share through the older people’s shared ownership (OPSO) scheme. Once you own 75%, you will not pay rent on the rest.

Disabled people:

You can apply for a scheme called home ownership for people with a long-term disability (HOLD) if there are no shared ownership homes for sale:

• where you need to live to be close to your support network
• that meet your needs

The HOLD scheme helps you to buy a home on the open market that is suitable for your needs. It works in the same way as the shared ownership scheme.

To apply online, please visit: Help-To-Buy

Priority for military personnel:

Only serving and some former military personnel will be given priority over other groups.

Help To Buy Equity Loan:

IMPORTANT NOTICE - Equity Loan Scheme Closure

Help to Buy: Equity Loan ends on 31 March 2023.

Key messages within the content and FAQ's are as follows:

• Deadline for submitting a Property Information Form is 6pm 31 October 2022
• Homebuilder - home built and new-home warranty in place by 31 December 2022 (Build completion)
• Help to Buy: Equity Loan Closes 31 March 2023 (Legal completion)
• There are no plans to extend or replace Help to Buy: Equity Loan
• Homebuilders to return reservation fees if they cannot build the home in time.

Homebuilders to release from contract if exchange has taken place and refund full deposit if they cannot build the home in time.

An Equity Loan is a loan from the government that you put towards the cost of buying a newly built home in England. Separate schemes are available in Wales and Scotland.

You must buy your home from a homebuilder registered for Help to Buy: Equity Loan.

You can borrow a minimum of 5% and up to a maximum of 20% (40% in London) of the price of a new-build home.

The amount you pay for a home depends on where in England you buy it.

The maximum property price is the full purchase price. You cannot change or negotiate this price.

Your homebuilder will be able to confirm if the home you want to buy is within the price range.

The equity loan, the deposit you have saved, and your repayment mortgage cover the total cost of buying your newly built home.
You can repay all or part of your equity loan at any time. A part payment must be at least 10% of what your home is worth at the time of repayment.

You must repay your equity loan in full:

• at the end of the equity loan term
• when you pay off your repayment mortgage
• when you sell your home
• if you do not comply with the terms set out in the equity loan contract and we ask you to repay the loan in full.

When you take out an equity loan, you do not pay interest for the first 5 years. When you start to pay interest in year 6, it is on the amount you borrowed.

The monthly interest payments you make do not pay off your equity loan. You do not pay monthly equity loan repayments to reduce the amount of equity loan you have borrowed.

An equity loan is secured against your home by a legal charge in the same way a repayment mortgage is.
Help to Buy: Equity Loan is exempt from regulation by the Financial Conduct Authority.

You may pay back more than you borrow:

The percentage you borrow is based on the market value of your new home when you buy it.

When you repay your loan in full or in part, the amount you pay back is worked out as a percentage of the market value, at the time you choose to repay.

If the market value of your home rises, so does the amount you owe on your equity loan. And if the value of your home falls, the amount you owe on your equity loan falls too.

Your home may be repossessed if you do not keep up repayments on your repayment mortgage, equity loan or other loans secured against it. Consider seeking independent financial advice before making any financial decisions.

We recommend that you read the full Help to Buy Equity Loan Buyers Guide, produced by the government’s Homes and Communities Agency.

Please visit Help-To-Buy-Loan for further information on how to apply.

Already a tenant of a local authority:

If you are already a tenant of a local authority then you may be able to buy your own home under the Right to Buy. Check with your landlord for more information. If you are a tenant of Dartford Borough Council you can find out more information on the Right to Buy web page.

Key steps to buying a home:

If you are able to raise a full mortgage yourself then your first step should be to visit the local banks and building societies of Dartford.

Try www.yell.com for listings of local establishments who will assess your finances and give you an indication of how much you will be able to borrow. Most prospective buyers will at this stage have at least a minimum deposit of 10% to put towards the house purchase.

Once you have this information you are ready for the fun part of viewing available properties.

To be kept abreast of all available properties, it would be prudent to register with all estate agents based in Dartford. They are all very keen to make a sale and will keep you informed of properties matching your requirements as they arise.

• Their details can be found on the website of The National Association of Estate Agents (www.naea.co.uk)
• Check the local newspapers property section and websites like www.rightmove.co.uk which have most estate agents properties available to view online

Once you have found a property that you wish to purchase, you will need to instruct a solicitor to proceed with a sale. The solicitor will instruct local land searches, check planning applications, environmental reports and issues with deeds relevant to the property.

Local solicitors can be found on www.yell.com or as recommended by your estate agent.

View more information on local land charges and searches.

The mortgage lender will also instruct a surveyor to carry out an inspection of the property to ensure that the money that is being lent is going towards a good investment.

The surveyors report (depending on the depth) will highlight any areas of concern and make suggestions for improvement. Some suggestions the mortgage lender may insist are carried out before purchase as they may affect the value of the property.

The cost of these improvements are normally negotiated between the seller and the buyer to achieve a satisfactory arrangement.

Unfortunately, not all house purchases proceed as hoped and there are many reasons why a potential purchase may fail. You may be refused a mortgage due to insufficient borrowing capacity, the survey carried out on the house may reveal unsatisfactory defects, a buyer/seller may 'pull out' of the sale, the list is endless...

It pays to be aware of the pitfalls concerning house purchase to avoid potential disappointment further down the line.

Between your lender and your solicitor, the sale will then progress to 'exchange' where all the contracts concerning the sale/s are passed to all parties involved, checked for accuracy and signed for acceptance.

Normally around a week separates the 'exchange' from the 'completion', where you pack up your belongings, pick up your keys and move into your new house!