Buying property with shared ownership mortgages - 'HomeBuy'.
HomeBuy is the name of the government scheme to help buyers through shared ownership mortgages. The HomeBuy umbrella scheme includes various different shared ownership, shared equity and affordable housing schemes including FirstBuy and part-rent / part-buy.
Shared ownership was previously referred to as new build homebuy which is essentially a part-buy / part-rent scheme for new build homes. It is also possible to purchase a second hand part-buy home from an existing owner in a process known as a 'resale'.
FirstBuy is a shared equity scheme where both builders and the Government have joined forces to provide funding for deposits on new homes. The deposit is in the form of an equity loan which enables customers to put down a deposit of just 5 per cent and access competitive 75 per cent LTV shared ownership mortgages from lenders.
Various shared ownership schemes have been introduced through housing associations who work on a non-profit basis. They are recognised by the government and are allowed to provide services to potential buyers.
Under the schemes, associations follow the concept of part-buy / part-rent, where a house purchase is funded through part mortgage and part rent. The housing associations work as a landlord for the part of house that is not bought.
Additional parts can be bought at a later stage using shared ownership mortgages. However, as this type of mortgage is seen as a less attractive business proposition, not all lenders will offer mortgages for this purpose.
