Buying a Property
Whatever your circumstances, Fabrick has a home to suit you and a range of innovative ways to help you afford it.
New Build HomeBuy
New Build HomeBuy (NBHB) has traditionally been known as shared ownership. NBHB is a government funded scheme to help people who may have thought buying a home was beyond their means. Through NBHB you buy a share of a property (usually 50%) and pay rent on the remaining share. Gradually you may buy further shares and eventually own your home outright, a process is known as ‘staircasing’.
When you want to sell the property you can sell the share you own to someone also eligible for the scheme or you have the option to sell the full 100%. When you sell your home, the property is sold at market value and you benefit from any increase in value that has built up on the share that you own.
To apply, you must:
- Be a first time buyer, a key worker, or be re-entering the housing market
- Not have your name on the deeds of another property
- Not be able to buy a property on the open market without assistance
- Have a household income below £60,000
Download the Housing Corporation's brochure on New Build Homebuy here.
Rent to Buy
The rent to buy scheme (also known as intermediate market rent) is for applicants who wish to buy a property but are currently unable to obtain a mortgage. The rent is 20% less than it would normally be on the open market. This is to encourage you to put the money saved towards a mortgage deposit.
The property would be let to you on an assured shorthold tenancy agreement. This is the standard tenancy agreement used by private landlords. The initial period is for six months and it would be reviewed at regular intervals thereafter. If, after the initial six month period you wished to leave the property, you would be required to give Tees Valley Housing one month's notice.
The property would be rented to you on the understanding that you would proceed with purchasing the property as soon as you were in a position to do so, either on a shared ownership or outright sale basis. The open market value would be assessed by an independent valuer at the time of purchase.
HomeBuy Direct
HomeBuy Direct is a relatively new scheme that was launched in September 2008. Under HomeBuy Direct, you will be offered an equity loan of up to 30% of the purchase price on selected new build schemes.
You need to have funds (including a mortgage plus any deposit where available) of at least 70% of the purchase price. HomeBuy Direct equity loans make up the rest of the 30%.
For the first five years you pay no interest on the loan but at the start of year six, you must start to make monthly payments at a rate of 1.75% rising at RPI + 1% per annum.
You can then buy a bigger share in your home over time in a process known as ‘staircasing’.
When the home is sold the equity loan is repaid as a percentage of the market value at the time of sale. So if you received a 25% contribution to purchase under HomeBuy you will repay 25% of the value when it is sold. Staircasing before the home is finally sold on will increase your share of the future sale proceeds.
To apply, you must:
- Be a first time buyer, a key worker, or be re-entering the housing market
- Not have your name on the deeds of another property
- Not be able to buy a property on the open market without assistance
- Have a household income below £60,000
- Be able to get a mortgage
Download the Homes and Communities brochure on HomeBuy here.
