Quick guide to the Chancellor’s Autumn Statement on Housing
November 2015
Help to Buy Shared Ownership Shared ownership allows you to buy a share of a home rather than the whole house, and then buy a greater share over time as you can afford to. You pay rent on the rest of the property. Currently, when you apply for help through this scheme, you have to meet certain criteria set by local councils, for example whether you work in the local area or are already in council housing. The Autumn statement says that the current restrictions on who can buy a home through shared ownership will be removed. From April 2016 anyone who has a household income of less than £80,000 outside London, and £90,000 inside London, can buy a home through shared ownership. Only military personnel will be given priority over other groups. The scheme will apply across England. You can buy a share between 25% and 75% of a home and then rent on the rest of the property which won’t be more than 3% of the amount left. For example, on a house worth £227,000 where the buyer has bought a 40% share, the rent won’t be more than 3% of the remaining 60% - in this case £4,000 a year, or £340 a month.
London Help to Buy Help to Buy Equity Loans are already open to both first-time buyers and home movers on new build homes in England with a purchase price up to £600,000. If you’re able to pay at least 5% of the value of your home as a deposit, the government will lend you up to 20% of the rest of the value of the property, alongside your mortgage of up to 75%. The scheme was due to close in 2020 but its been extended by a year and, to reflect the current property market in London, from early 2016 the government will increase the upper limit for the equity loan it gives new buyers within Greater London from 20% to 40%. With London Help to Buy equity loan: • • •
you’ll need to contribute at least 5% of the property price as a deposit the government will provide a loan for up to 40% of the price you’ll need a mortgage of up to 55% to cover the rest
More information on how to use London Help to Buy will be available in early 2016.
20% discount on 200,000 new Starter Homes First-time buyers will be able to get a 20% discount on 200,000 new Starter Homes. Starter Homes are new build homes available at 20% off the market price and are only open to first-time buyers under 40. You have to register on the website at www.new-homes.co.uk/starter-homes to find out more information on the schemes in the local area.
Buy to Let and Second Home purchases will be subject to Stamp Duty From 1 April 2016 people purchasing additional properties such as buy to let properties and second homes will pay an extra 3% in stamp duty. The following rates will apply:
PROPERTY VALUE
STANDARD RATE BUY TO LET/SECOND HOME RATE [FROM APRIL 2016]
£40,000 - £125,000
0%
3%
£125,001 - £250,000
2%
5%
£250,001 - £925,000
5%
8%
£925,001 - £1,500,000
10%
13%
£1,500,001 +
12%
15%
Housing Association Tenants Currently, most people who rent a council home have the right to buy their home from the local authority. There are discounts on the home price available in many cases, depending on how long people have lived there. Right to Buy will now be extended to up to 1.3 million housing association tenants during 2016. A small number of housing associations will be piloting the scheme over the next few months and in the meantime if you would like more information visit:
www.righttobuy.communities.gov.uk
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