Website of the UK government

How does Open Market HomeBuy work?

This scheme provides ‘equity loans’ to those eligible for assistance. An equity loan is where the lender shares in any rise (and sometimes any fall) in the value of the property over the course of the loan. The loans come from participating equity loan providers, and are administered by them and the ‘HomeBuy Agents’. The Housing Corporation, a government agency, appoints HomeBuy Agents.

The Open Market HomeBuy scheme works by providing an ‘equity loan’ for up to 50 per cent of the value of your home. You can choose from two different options within the Open Market HomeBuy scheme:

• ‘MyChoiceHomeBuy’, provided by a group of eight housing associations called ‘CHASE’
  
• ‘Ownhome’, provided by a housing association called Places for People, in partnership with Co-operative Financial Services (the Co-op Bank)

Who can apply

You may be eligible if you are:

• a council tenant
  
• a housing association tenant
  
• on the housing register and a priority for  a council or housing association home to rent
  
• a key worker working in the public sector – ie someone who works as a teacher, nurse or police in areas where high demand for housing means there are problems in recruiting staff
  
• a first time buyer who cannot afford to buy a property, as identified by the Regional Assemblies
  

What can you get?

MyChoiceHomeBuy provides:

• an equity loan of between 15 to 50 per cent of the value of the property you intend to buy – this means you would need to cover the rest of the cost of your property through savings or/ and a mortgage provided by a range of qualified lenders regulated by the Financial Services Authority

Ownhome provides:

• an equity loan of between 20 to 40 per cent of the value of the property you intend to buy - this means you would need to cover the rest of the value of your property through savings or/and a mortgage initially provided by the Co-operative Bank

What are the interest charges?

MyChoiceHomeBuy:

• from year one, the interest charge for the equity loan will be equal to 1.75 per cent of the value of the loan, which is paid for monthly
• this charge will increase annually by an amount equal to the Retail Price Index plus 1 per cent
  The Retail Price Index measures changes in prices over the course of a year.

Ownhome:

• there is no interest charged for the first five years
• from the sixth year of the equity loan there will be an interest charge equal to 1.75 per cent and 3.75 per cent from year 11 onwards

Do you need a deposit?

You don’t need a deposit. However, if you do have some money to put towards the cost of the property, then you can use this to reduce your mortgage.

What are the repayment conditions?

If you are eligible, you do not have to repay the money provided by the HomeBuy Agent/equity loan provider until you sell your home. You can pay it back earlier as well, partially or in full, provided you comply with the terms of your initial mortgage agreement. You  will have to share any increase in your property’s value with the loan provider

How to apply

If you think you are eligible and want to know more about the HomeBuy scheme, please contact your local HomeBuy Agent to find out what options are available in your area. If you are a Key Worker, you should contact a HomeBuy Agent for the area where you work.

HomeBuy Agents will be able to advise you on your eligibility and take you through the application process. You can also apply directly to the equity loan providers who will ask you to complete a HomeBuy application form. To get in touch with your local HomeBuy Agent or the loan providers, you should use the contact details below.

Loan providers

• Ownhome – phone 0845 607 0110
• MyChoice HomeBuy (CHASE) – can be contacted through your local {HomeBuy Agent}

• Find a HomeBuy Agent in your area

HomeBuy schemes and disability

There is also an option for people with long term disabilities to buy a house on a shared ownership basis. If you think this may apply to you, then use the link below and contact the HomeBuy Agent in your area.

• Find a HomeBuy Agent in your area

More useful links

• Buying your home
• Planning for buying a home
• Solicitors and conveyancing
• Find your local Citizens Advice Bureau (opens new window)