HomeBuy Direct

HomeBuy Direct is a shared equity scheme co-funded by the Housing & Communities Agency (HCA) and the Housebuilder. The scheme is designed to help people who wouldn’t otherwise be able to get onto the property ladder. It is aimed at First Time Buyers and for those returning to the market as a result of relationship breakdown or families who are overcrowded in their existing home. Social tenants and key workers will be given priority.

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Click here to download the HomeBuy Direct Buyers' Guide.

The scheme is exclusively available to qualifying buyers of new build homes only, and with total funding exceeding £1billion some 40,000 customers expected to benefit before fund allocations expire at the end of March 2012.

The funding for the scheme is new build site and plot specific. The customer must purchase between 70% and 85% of the value of the property. The remaining funds are made up by any contribution the customer is able to make, with the balance funded between the HCA and the housebuilder in the form of an equity loan.

No interest is payable on the equity loan for the first 5 years. Thereafter, the interest charge is 1.75%, increasing annually by RPI +1%. The equity loan must be repaid in full within 25 years or when the mortgage is repaid – whichever occurs first.

The customer is free to sell their home on the open market after 12 months. When they do, they will repay the equity loan by way of a share of the sale proceeds. This repayment will be shared equally between the HCA and housebuilder.

The customer can also “staircase” to buy an increase share in their property after the first 12 months. The minimum staircase steps are 10% of the equity loan.

To qualify, customers must not be in receipt of total household income above £60,000 and should not already be a homeowner unless they have been nominated by their local authority as being in urgent housing need.