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Key worker and other affordable home buying schemes

HomeBuy programmes are government schemes run by authorised agents. They're designed to make it financially easier for certain people to buy homes. In London, HomeBuy is known as First Steps.

Under several of these schemes, people working in certain public sector professions - known as key workers - may be eligible for assistance.

Who are key workers?

Under the current system, the following categories of people are classified as key workers (at least one member of your household needs to be working in one of these roles):

Clinical NHS staff (excluding doctors and dentists);

Teachers and nursery nurses, either in schools, sixth form colleges or further education;

Police officers, community support officers and some civilian staff;

Prison officers and some other prison staff;

Probation Service staff;

Local authority planners;

Firefighters and certain other staff in Fire and Rescue Services;

Connexions personal advisors if employed by a local authority or a Connexions partnership;

Armed Forces personnel, Ministry of Defence clinical staff, Ministry of Defence police officers and uniformed staff in the Fire and Defence Service;

Qualified environmental health officers/practitioners working in a local authority, government agency, the NHS or other public sector agencies;

Highways Agency staff in certain safety roles in the traffic officer service;

Social workers, nursery nurses, educational psychologists and therapists employed by local authorities, the Children and Family Court Advisory Support Service or the NHS.

Are there any other criteria?

To be eligible for help from a HomeBuy scheme, key workers also need to fit at least one of the following criteria:

Have a household income no greater than £60,000 a year;

Be a first-time buyer;

Be unable to otherwise afford a property that meets your household's needs;

Be a homeowner who needs to buy a bigger property to meet your household's needs, but cannot otherwise afford to.

If you're not a key worker

There are also several initiatives to give financial help to non-key workers buying homes.

New build

There are two types of HomeBuy schemes available to people wanting to buy newly-built homes:

Equity loan: Through this system, you can apply for a loan towards the price of a home, and this loan will have no charges attached for five years.

Shared ownership: This is when you buy a percentage of a home (and take out an appropriate mortgage) and pay rent on the remaining proportion.

You can then pay more money when you can afford it, to work your way towards owning your home outright.

For the elderly

There's also a HomeBuy scheme specifically aimed at older people: Shared Ownership for the Elderly.

Essentially, this works like a regular shared ownership scheme, but is only open to people aged 55 or over - and you can only buy up to 75% of your home.

Once you own that percentage, you don't have to pay any rent on the remaining share.

For the disabled

Home Ownership for People with Long Term Disabilities (HOLD) is a scheme that allows disabled people to buy any home that is for sale on a shared ownership basis.

You can only apply to own a property via HOLD if no other HomeBuy schemes meet your specific needs.

For people living in council and housing association homes

Finally, there are three specific HomeBuy schemes for council and housing association tenants:

Right to Buy: This gives certain council tenants the right to buy the homes they rent.

Right to Acquire: This gives certain housing association tenants the right to buy the homes they rent.

Social HomeBuy: This gives certain tenants in both of the above categories the opportunity to buy a share in their homes.

All three schemes are run by either councils or housing associations.

You can find out more about the different types of HomeBuy schemes here.

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Purpose of Mortgage

A first time buyer is a buyer who has never purchased a property before and generally has previously lived with relatives or friends or occupied rented property

House purchase is when an applicant, who has been a previous purchaser/occupier, is intending to purchase a different property for owner-occupation

A remortgage occurs when an applicant wishes to switch a mortgage loan from one lender to another without moving properties. The existing loan is repaid by a loan from the new lender. Depending on the amount of equity, this could also be a means of raising additional funds.

A buy to let mortgage is for when a property is bought as an investment and rented out to a tenant who pays a rental income.

A right to buy mortgage is only available to council tenants or certain types of tenants where the landlord has received a subsidy from the Local Authority. The tenant must also fit certain eligibility criteria related to the type of property and the length of time they have lived there. The amount of discount depends on how long the tenant has lived in the property and is also calculated taking into account any improvements carried out at the tenants own expense.

A self build mortgage is taken out on a property that is either still to be built or still under construction. Typically, the lender will only pay out the loan in stages, corresponding to the completion of various stages in the construction. There are generally six stages to a build where your mortgage company will release funds to allow the project to continue. They are:

Stage 1 - purchase of the land or property;

Stage 2 - preliminary costs and foundations or preliminary costs and structural overhaul;

Stage 3 - main structure erected;

Stage 4 - making the property wind and watertight;

Stage 5 - first fix and plastering;

Stage 6 - second fix through to completion

This is a specialised mortgage product designed for people over the age of 55 , which allows them to release the some of the equity they have built up in the home; this could be through owning the property outright, or from the value of the home increasing over time.

The householder retains ownership of the house whilst being able to use the equity to boost their income. There are several products on the market, some of which you only pay the interest back during your lifetime, and others where you pay nothing back during your lifetime and the repayment is taken out of the estate on death. For this reason, it should be noted that the applicant should be aware that they will be asked if they have discussed with their family members the reasons for applying for equity release.

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