Q & A for key workers

Transcription

1 Q & A for key workers Please see below for some frequently asked questions about the Key Worker Living Scheme. Full detail can be found at the department for Communities and Local Government website at How do I apply? For further details on what is available locally and to obtain an application form you will need to contact the HomeBuy Agent for the area in which you work. What is a HomeBuy Agent? A HomeBuy Agent is a registered social landlord (commonly known as Housing Association) that markets housing schemes including those for key workers across an area. They deal with applications and arrange the help you need. How do HomeBuy Agents work? HomeBuy Agents provide a one-stop shop for key workers assessing eligibility and providing information on all the housing options available in their area. Each HomeBuy agent has a dedicated telephone number and web-site for key workers to check out the detailed rules, obtain application forms and get any necessary advice about the programme. A list of HomeBuy Agents and their contact details for the eligible areas can be found on our website at anded.pdf. Is there a maximum income I can earn? Yes. The maximum household income to qualify for help is 60,000. If I already own a home am I still eligible for the scheme? Yes. If you already own a home and you meet the eligibility criteria, you could receive help to buy a larger home to meet your family needs. What happens if I need to move to a larger home when I start a family? If you still meet the eligibility criteria for help as a key worker, you can sell the first home and carry forward the help you received. You can use the proceeds of the sale, plus the help you originally received to buy a bigger home. Three products are available:

2 Expanded Open Market HomeBuy Equity loans to buy a home on the open market. Key workers are typically expected to raise a mortgage of around 75 percent of the property's value New Build HomeBuy - shared-ownership of newly built properties. You buy at least 25 percent of the home and pay a reduced rent on the remaining share Intermediate renting where the rent is set at a level between that charged by social and private landlords and the accommodation is provided by a registered social landlord What is Open Market HomeBuy? Open Market HomeBuy enables people to buy a property on the open market with the help of equity loans. Purchasers will need to raise around 75 percent of the purchase price of their home from a conventional mortgage, and any deposit, if they have one. The balance will be made up by two equity loans of around 12.5 percent of the purchase price each. One loan will come from Government through a HomeBuy Agent. There will never be any interest charges on this loan. The other loan will come from one of four mortgage lenders Halifax, Nationwide, Advantage or Yorkshire Building Society. This loan will have no charges for the first five years, and interest charges will be capped at 3 percent for a further five years. Purchasers are required to repay the lender s equity loan upon payment of the final instalment of their mortgage and to repay both the Lender s and the HomeBuy Agent s equity loans upon sale of their home. When the equity loans are repaid, the purchaser shares any increase in the property s value with the Lender and the HomeBuy Agent. If two key workers buy a property together can they get two equity loans under Open Market HomeBuy? No, you cannot combine two separate applications for financial assistance. The joint income will be taken into consideration to assess one loan. Could I buy any type of property through Open Market HomeBuy? You have to buy a property suitable for your household s needs and within a reasonable travelling distance of your workplace. Mobile homes (including fixed homes covered by the Mobile Homes Act 1983), caravans and houseboats cannot be purchased through Key Worker Living. How much will I receive through Open Market HomeBuy? This will depend upon your household s income, savings, any property you already own, any financial commitments such as student loans, the mortgage you can get, and the purchase price of the property you are buying. You will be expected to raise 75 percent of the purchase price as a mortgage. What is New Build HomeBuy/Shared Ownership? Purchasers are able to buy a share of between 25 percent and 75 percent (depending on what they can afford). They will pay a subsidised rent on the remainder. Purchasers pay a rental charge on the provider s share of the property. The rental charge will be capped at 3 percent on the provider s share of the property, with a target average rent of 2.75 percent. Annual increases in rental charges will be limited to the in-year increase in the Retail Price Index plus 0.5 percent.

3 Purchasers have a full repairing lease and will be fully responsible for all maintenance charges and outgoings, in the same way as any other homeowner. Purchasers living in flats have to pay service charges, and providers will set up and manage a sinking fund to cover the cost of longer term works. You can increase your share in the future, in minimum 10 percent tranches, when you can afford it and you may even buy outright. If you sell the property, the percentage of the proceeds you receive is equal to the percentage of the property you own. If you stop being a key worker, you will no longer be eligible for help. You can ask the HomeBuy agent for more information. Does the Key Worker Living Scheme support the provision of rented accommodation for key workers? Yes. As part of the programme, registered social landlords will make properties available to key workers for intermediate renting. That is, at a rate between social rents and open market rates. What level of rents will be charged for intermediate rent homes? You are likely to pay around 75 percent to 80 percent of the local market rent for the type of property you live in. You would have an assured shorthold tenancy while you remain a key worker. What happens if I cease to be a key worker? Will I have to repay the assistance I received? Yes. If you leave eligible employment then you will have to repay the assistance you received. Purchasers of New Build HomeBuy properties will generally have five years, in which to sell their share in the property they purchased or staircase to full ownership if they leave qualifying key worker employment. Purchasers of Open Market HomeBuy will generally have two years, in which to pay back Otherwise repayment of assistance would only be triggered by sale or transfer of the property. Are there any circumstances in which I would not repay the assistance? There are some circumstances where leaving eligible key worker employment will not trigger clawback. There are where: You retire, provided that a minimum of five years continuous service has been undertaken in a qualifying role since you were granted assistance under the scheme You were made redundant You left with your employer's permission, for health reasons validated by a health professional (i.e. early retirement on health grounds, dismissal on health grounds) or You die in service In such cases, sale of the property or transfer of ownership only would trigger repayment.

4 Who notifies the HomeBuy Agent if a key worker leaves their employment? The key worker must notify the HomeBuy Agent within seven days in writing of changing jobs, even if they still consider themselves to be a key worker. If I go on a career break, will I have to pay the money back? You can go on an agreed career break for up to three years. If you choose not to go back after this three year period you will cease to be a Key Worker on the last day of the three year period. This is the date from which the clawback period will begin. Will clawback apply if I move to a different key worker role from the one I currently occupy? For the majority of key workers clawback will not apply if you move from one eligible key worker post to another, within the three eligible KWL regions. What happens if I buy and then next year the rules change and I am no longer a priority or eligible for KWL? Will I have to pay all the cash back? No - eligibility status will be judged against the criteria prevailing at the time you were given financial help. Are key workers who are in the UK on work permits eligible? Yes, but the applicant must be able to demonstrate to the HomeBuy Agent that they can sustain home ownership. Applicants who are subject to immigration control are less likely to be able to satisfy this requirement unless they have indefinite leave to remain in the UK. Can people on temporary contracts buy properties through KWL? Yes in certain circumstances key workers on temporary contracts will be able to access KWL as long as at the time of application: There are at least six months remaining on the contract The contract was issued at the outset for at least 12 months At least three months of the contract have already elapsed; and For HomeBuy the [RSL] is satisfied having regard to the applicant's skills, employment record and intentions that there is a reasonable prospect of continuing employment as a qualifying key worker sufficient to sustain home ownership in the longer term For those key workers who do not meet these requirements they can access intermediate rented properties. Can I borrow more money against a property I have purchased through KWL? Subject to the agreement of your HomeBuy Agent or RSL it is possible to borrow against any capital you have in the property as a result of for example paying off some of your mortgage. This would need to be registered as a third charge on the property. Subject to the agreement of your HomeBuy Agent or RSL it is also possible to borrow money against an increase in value of your property as long as the additional borrowing is to fund repairs or improvements to the property and is limited to 75% of the increase in value between the original market value and the current market value.

5 In considering any increased borrowings the HomeBuy Agent or RSL will need to be content that the level of borrowings will not affect your ability to sustain home ownership in the longer term. For further detailed information please see the Capital Funding Guide on the Housing Corporation website