We offer what’s called a low cost home ownership (LCHO) scheme to help first-time buyers to get on the property ladder.
With an LCHO scheme, you can buy a home at a percentage of its open market value, typically 70%. It’s a more affordable option for buying a home as you need a smaller mortgage and deposit.
For example, you would need a deposit amount of 5-15% of the 70% equity you will hold in the property, rather than needing a deposit for 100% of the house value, as you normally would.
The remaining (30%) cost of the property is funded by an equity loan. Unlike your mortgage, there are no repayments to be paid on this loan.
You may increase your equity share at a later date by purchasing additional equity (but not less than 10%), or you may purchase the whole amount (30%) outright. This is normally restricted to within the first three years of you living in the home.
If you wish to sell your home, you can sell your 70% equity share to another qualifying first-time buyer and don’t repay the loan. However, if your home is sold for 100% on the open market, the 30% equity loan has to be repaid upon completion of the sale.
Who is eligible?
Low cost home ownership schemes at new housing developments are done on a first come, first served basis. Applications are assessed on affordability and in accordance with the allocations policy for the particular development.
If you are considering applying for an LCHO scheme, please check whether you are eligible using the checklist below:
- You are 18 years of age or over
- You are in permanent employment
- You are unable to afford a suitable home on full ownership
- You can afford to purchase between 50% and 90% of the property’s full value
- You can provide an in principle mortgage offer from a reputable mortgage lender
- You are not in rent arrears or in breach of a tenancy agreement
- You are not already a homeowner (subject to individual circumstances)
