Open Market Homebuy is a Government-backed scheme that aims to help certain groups of people who can not afford to buy a home on the open market without assistance The ’Homebuy’ scheme provides you with an equity loan equivalent to 25 per cent of the purchase price of a property.. The loan is paid back when the property is resold and the amount paid back is 25 per cent of the value of the property at the time of sale.
The Housing Corporation and some local authorities fund the schemes and offer them through housing associations. Demand is high and some local authorities may tailor the scheme to meet housing needs in their area. There may be a waiting list in some areas. The scheme provides access to additional money called equity loans, which run alongside a conventional mortgage loan.
Two equity loans, each worth around 12.5% of the value of your home, are provided:
– the first is provided by the same lender that you select to provide your conventional mortgage loan; and
– the second is provided by the Government and administered by a HomeBuy Agent
– a housing association in England that has been appointed to operate the scheme.
No interest is charged on either of the equity loans for the first five years and you will never be charged interest or need to make monthly payments on the HomeBuy Agent’s equity loan. However, the amount you will have to repay the lender and the HomeBuy Agent will be linked to the value of your home at the time you sell it, plus a redemption fee where this is levied’.
The main groups of people to be helped by the scheme are existing tenants of housing associations and local councils, people on housing waiting lists for social rented housing, key public sector workers in London, the South East and the East of England, and some other priority first time buyers. This covers Police, NHS workers and other public sector workers.
See also The Right to Buy scheme which allows council tenants to buy their homes at a discounted price, provided that they meet minimal qualification criteria.
To qualify for the Right to Buy you need to have been a public sector tenant for a minimum of two years.