In recent years, several affordable housing ownership schemes have been launched by the government to make buying a property easier for people wanting to own a home.
- Help to Buy: Equity Loan
- Shared ownership
- Right to Buy
- Forces Help to Buy
Help to Buy: Equity Loan
Please note HSBC does not participate in this scheme.
Properties bought under this scheme must be:
- the only property you own
- lived in by the owner, they can't be let
You can borrow up to 20% of the purchase price of a new-build home (up to £600,000) from the government. To make up the remainder, you need a 5% deposit and a 75% mortgage.
There's an interest-free period for the first 5 years. After this, you’ll need to pay interest on the loan and if you sell the property you’ll need to repay any outstanding amount.
If you can’t get a mortgage to buy a property outright, a shared ownership scheme could enable you to buy a 25-75% share in partnership with a social landlord like a housing association. You would then pay 'rent' on the share that you do not own to the landlord.
For example, if you bought a 50% share of a property valued at £100,000, then you would pay rent on the remaining £50,000.
Shared ownership gives you the flexibility to increase the share of the property that you own (up to 75% of the value) at any time.
Right to Buy
The Right to Buy scheme makes it possible for existing council and housing association tenants to apply for ownership of the properties they rent.
Under the scheme, you can also make joint applications for the Right to Buy with other people who have been living in the property for at least a year.
Forces Help to Buy scheme
Similar to the Help to Buy equity loan scheme, but available exclusively to regular members of the armed forces. This includes members of:
- the Royal Navy
- the Royal Marines
- the Royal Air Force
- the British Army.
Under this scheme, you can borrow up to 50% of your salary interest-free (limited at £25,000) to raise a deposit.