Peter Dockar, head of mortgages at HSBC, says there are no other products that provide borrowers with a discount off the market value of a property to the extent of the Right to Buy scheme.
But Mr Dockar says there are other schemes to help homebuyers:
1) New Build Homebuy is government-backed and the borrower finances between 25 per cent to 75 per cent using a mortgage facility and rents the remainder. There will be an option for the borrower to purchase 100 per cent of the property.
2) First-time buyers initiative is also government-backed. The borrower finances a minimum of 50 per cent with a mortgage or cash and pays the government an annual fee (up to 3 per cent). There will be an option for the borrower to finance 100 per cent of the property.
3) Keyworker Living Scheme, previously known as the ‘starter homes initiative for key workers’ scheme’, which is a type of shared ownership launched by the government in association with local authorities.
Mr Dockar says this can be considered subject to guidelines. The local authority will provide an amount towards the customer’s purchase.
There is usually a clawback period of five years on this amount after which time the customer will have nothing to pay back to the local authority. The customer is still required to provide a deposit from their own funds towards the initial property purchase.
But this scheme has now been withdrawn by the government and Mr Dockar says therefore HSBC only sees this scheme with re-mortgage applications.
4) Lift, formerly known as Homestake, is a shared equity scheme currently supported by the Scottish Government where grants are provided by the Scottish government to registered social landlords to enable them to sell properties.
Under Homestake, additional equity can be purchased from two years after the date of purchase of the property.
But Mr Dockar says advisers should note this scheme has an option whereby the landlord or Scottish government can permanently retain their 20 per cent equity stake – known as a ‘golden share’ (in areas where there is lack of affordable housing) and in these cases are not suitable for mortgage facilities as the purchaser would not have the option to purchase 100 per cent of the property value as part of the agreement.
