Social HomeBuy scheme: Everything you need to know

If you're renting but feel the time is right to own a property, Social HomeBuy could be the scheme for you.

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By

Amelia Glean

Updated

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Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Social HomeBuy is a grant-funded scheme that you can find out about from your local housing association or local authority.

How does it work?

It provides tenants with the chance to buy a share in their rented home and offers a discount of between £9,000 and £16,000 on the initial share.

The amount of the discount you receive will depend on the location of the rented property.

You can choose to buy a minimum initial share of 25% of your home, with the landlord keeping possession of the remaining equity. The landlord will then reduce the rent according to the percentage of the un-owned equity.

If you choose to rent part of the property still, you will only pay the landlord 3% per year of the properties market value.

But if you want to own the home outright, you will need to continue buying shares until 100% of the property is yours (yay). This is called staircasing.

Be sure to do your sums first before committing though!

Am I eligible?

  • You can only apply if you’re an assured or secure tenant.
  • You must live in a home that is suitable for sale. For example, shared accommodation is not accepted.

What are my options after buying through Social HomeBuy?

As mentioned above, the staircasing process can come into play, by which the tenant gradually buys more and more of the property. As more of the property is purchased, the rent is reduced proportionately.

If the owners of a property wish to sell their home, their share is marketed for sale through the housing association.

This means others in need of affordable housing have the opportunity to own a low-cost home.

Keep in mind that even if 100% of the property has been purchased, there may be service charges that still have to be paid.

How can I apply?

Find out directly from your landlord (local authority or housing association) if they offer the scheme and whether your home is included.

Your landlord will likely consider your circumstances before deciding whether to accept you for the scheme, which will involve a financial assessment to help decide what share you may be able to afford and sustain.

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