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FirstBuy shared equity scheme
Purchase a new home with a 5% deposit
The FirstBuy scheme is the Government's latest 'shared equity' or equity loan scheme, enabling customers to purchase a brand new home from a national house-builder with a deposit of just 5% and yet accessing mortgages at the competitive 75% loan to value. Under this equity loan scheme, a buyer puts down their own 5% deposit and then receives a 20% equity loan to make a total equity stake of 25%. This equity loan is provided half each by the Government and the housebuilder. The most important point for the customer is that they therefore have 25% equity in total and the participating lenders will generally therefore allow them access to 75% mortgages - where rates tend to be attractive. The Firstbuy programme replaces Homebuy direct (hence, some customers have confused the two and you may have heard of Firstbuy direct or the Firstbuy direct scheme).
Questions: what is shared equity?
Shared equity and shared ownership are not the same product. Shared ownership technically refers to the 'part buy part rent' which is usually offered by housing associations, and where participants purchase a share in a property from as little as 25% and pay reduced rent on the remainder - but they only ever legally own that share until they 'staircase' and purchase further shares. In contrast, with shared equity, participants are likely to legally own the whole property but receive an equity loan to make up a significant part of their deposit. Shared equity and equity loan schemes are generally provided by housebuilders though there are some houses sold on the FirstBuy and HomeBuy Direct schemes where a housing association is the equity loan provider.
What is FirstBuy?
FirstBuy has replaced 'HomeBuy Direct' as the main shared equity scheme offered by the Government. The difference is that with FirstBuy, the equity loan is no more than 20% whereas with HomeBuy Direct the equity loan was up to 30%.
Further information
To apply for a mortgage on a FirstBuy property, submit a decision in principle application or contact us for more details. To find FirstBuy properties for sale, including shared equity and other shared ownership and part buy part rent homes, visit our affordable housing property portal where we hope to have FirstBuy equity loan scheme properties available in the coming weeks.
Shared Ownership Case Studies
Latest News
Shared ownership properties for part buy part rent
14th February 2012
If you are looking for affordable housing to buy, we may have the answer. At sharetobuy.com you can search for shared ownership properties available to buy through the part buy part rent scheme. These are properties generally sold by housing associations where you buy a share starting at 25% and pay an affordable rent on the remainder. Start searching now.
100% shared ownership mortgages and great 90% open market deals
20th January 2012
We now have access to 100% shared ownership mortgages. Customers can access zero deposit mortgages for part buy part rent but they must have no adverse credit history. More details here. We have also cut our open market 90% exclusive discount rate with no fees or early repayment charges. Read about our 10% deposit option for young professionals and first time buyers.
Tools
- Search: search for shared ownership properties; search for shared ownership solicitors.
- Calculators: shared ownership mortgage calculator; staircasing calculator; open market calculator.
- Apply: shared ownership mortgages; agreement in principle
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