Home ownership schemes operated by developers, such as shared equity are generally not means tested and are open to all those who are looking for opportunities to make home ownership more affordable.

What types of home ownership schemes are available?

There are several main types of home ownership schemes including:shared ownership, shared equity and rent before you buy. Many developers are also offering assistance with selling your existing property such as part exchange.

Shared Ownership

Shared ownership was originally intended to help people who cannot afford to buy a property on the open market, such as first time buyers, those on low incomes and key workers. Shared ownership schemes provide the option to buy a share of a property (normally 25%, 50% or 75%) while the rest is owned by a housing association/ developer. A mortgage is paid on the share of the property owned you own and rent on the remainder. You are given the option in the future to buy a larger share and may eventually be able to afford to buy the whole property.

Shared ownership can be a good option if a regular income is present however there is not the option to be able to afford to buy a property outright.

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Shared Equity

Like shared ownership, the shared equity scheme allows you to purchase a share in a property however unlike shared ownership, you won't need to pay any form of rent or occupancy payment for the part of the home you don't own. Instead, if you sell the property, the housing association/ developer will take its share of the proceeds. For example, if you own 60% of the home, you will receive 60% of the sale price when you sell, and the housing association/ developer will receive the remaining 40%. When you purchase a peoprty through shared equity it is importnat to remember you will be responsible for paying charges such as council tax.

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Rent before you buy

Rent before you buy is an innovative new scheme allowing you to choose the home you'd like now and then rent it with the option to buy it in a timescale to suit you. You buy over an extended period of time (normally 2 - 3 years) with a much smaller deposit, the purchase price is fixed at the outset, there is no lengthy sales process and it's all backed by solicitor involvement to protect your interest.

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Part Exchange

Part exchange aims to help those people who would like to buy a new home but have a property to sell. The developer agrees to purchase the home owner's property in part exchange for the new property they wish to buy. When applying for part exchange you will normally be be offered in the region of 90 - 95 per cent of the market value of your current home (this may vary and is subject to independent valuations). In order to eligible you must be a homeowner who is looking to move up the housing ladder.

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For further information on Affordable Housing or for Independant Financial Advice, please contact the Rettie & Co. New Homes sales team on 0131 220 4160 or email buyingadvice@rettie.co.uk