Buying or renting in the Uk can be incredibly costly, you might know the typical schemes such as right to buy and the help to buy equity loan. Here are 5 unknown ways to buy or rent.
Discounted market sale
Under this route the local council will usually let you buy land and then build on said land. You will however only own part of the land and the rest belonging to the council. When you sell the property, the council will expect to receive its share of proceeds. This is an especially good route for first time buyers who struggle with mortgage affordability due to rising house prices and you should contact your local council or any council where an available undeveloped land exists to inquire further.
There is an option to buy more equity, hence staircase but this is totally at the discretion of the council. You also don't pay any rent to the council on their equity of the property which allows you to save more through suitable schemes such as the Lifetime ISA.
Finally,As with most affordable housing schemes, you can generally only purchase a property under the discount market sales scheme, in a Local Authority you have a link to; for example an Authority that you either live or work in and your household income must be below the limit stated.
Starter homes scheme
The starter home scheme allows first time buyers between the age of 13-40 with a combined income of less than £80,000 outside london and £90,000 in london to buy homes at 80% of their value. Essentially receiving a 20% discount. This is great news for first-time buyers.
House prices are capped at £450,000 in London and £250,000 outside London.
You cannot sell the property within 15 years of buying if not you might owe the Government the 20% discount made from the sale.
The Government has made brownfield sites(old commercial and industrial sites) available to property developers for this scheme to work. The 30 councils signed up to deliver the first homes are as follows: Blackburn, Blackpool, Bristol, Central Bedfordshire, Cheshire West and Chester, Chesterfield, Chichester, Lincoln, Ebbsfleet, Fareham, Gloucester, Greater Manchester, Lincolnshire, Liverpool, Luton, Mid Sussex, Middlesbrough, North Somerset, Northumberland, Pendle, Plymouth, Rotherham, Rushmoor, Sheffield, South Kestevan, South Ribble, South Somerset, Stoke-on-Trent, West Somerset and Worthing.
Discount Full Ownership
This scheme is provided by a private property developer called pocket whom in association with the local councils builds 15-50 one bedroom apartments on small urban sites. The homes sell for at least 20% below market value. You will need to get a mortgage for the house just as any other and take into account the maintenance & charges paid to pocket for the communal areas of your home.
Intermediate Market Rent
Intermediate Market Rent (IMR) is an Affordable Rent Scheme designed to assist working households who are unable to afford the cost of renting a home on the open market or cannot access social rented housing.
Intermediate Market Rent is usually set at around 80% of the market rent value of similar property in the local area.
The service charge is included in the rent.
After entering a six month assured short-hold tenancy it is then renewed on a monthly basis, although some initial rental periods can be longer. All rentals will be subject to a credit check and referencing.
Deposits are held within the deposit protection scheme and provided the home is returned to the landlord in the same condition as when it was let to you, the deposit is returned.
Each rental development will have eligibility criteria. This can be based on the type of accommodation and the area in which a potential tenant currently lives or works.
Tenancy can be terminated with one months notice. Should the landlord wish to terminate, they are required to give two months notice.
Rent to Save
The rent to save scheme is a life save for first-time buyers who don't have enough deposit for a mortgage. The scheme works by renting at a highly discounted rate whilst putting the savings earned from the rental discount into a savings account in the hope of paying down a mortgage deposit in as little as two years
To achieve this the housing provider will discuss with you your savings goal prior to accepting you on the scheme and discuss how they intend to help you achieve your goals.They will also explain how they will review your savings goal regularly to ensure you are on track.
The key features of the product are:
Let at up to 80% of the equivalent market rent for that property, with a fixed rate of inflation.
The property would be let on an assured short-hold tenancy for a fixed term, up to five years, linked to (but not necessarily the same as) the required savings period. The period can be extended if you still want to buy but need a bit more time.
The tenancy can be ended, subject to the terms of your tenancy agreement and initial fixed terms being spent, at any point.
A savings plan will be put in place to help you raise a sufficient deposit to purchase on either shared ownership or equity loan terms within five years.
The housing provider will discuss with you their regular reviews to check your progress in saving for a deposit.
You can purchase on shared ownership or equity loan terms at any point in the tenancy, subject to still being eligible.