Tynwald last week approved the Department of Health and Social Care’s Shared Equity Schemes which have been designed to modernise and improve assistance for first time buyers following public consultation.
The new schemes will launch on 31 July and will replace the current Grant and Top-Up Loan assistance available under the House Purchase Assistance Scheme 2012.
For the first time Government has differentiated between the maximum purchase price of properties purchased on the open market and ‘approved’ properties, to enable more choice for first time buyers and help the housing market on the Island. Another important change for applicants to be aware of is the requirement to provide a deposit of 5% of the house purchase price as a condition of the Department providing assistance.
The first principle of the Shared Equity Schemes, as with previous House Purchase Assistance Schemes, is that they are intended to help those who cannot help themselves to get onto the first rung of the housing ladder.
Shared equity means that subject to the first time buyer meeting the eligibility criteria, Government can offer support by purchasing a share in a property of between 20% and 30%, which will be interest free for two years with the ability to buy-out the Department’s share over time. This support significantly reduces the burden of mortgage capital and interest repayments, which can make all the difference in the first few years of home ownership and can make the possibility of affording the first rung on the property ladder a reality.
Minister for Health and Social Care, Howard Quayle MHK, said:
'I am delighted my Tynwald colleagues have agreed to the introduction of these Shared Equity Schemes. The new eligibility criteria means the Department can now provide targeted assistance to a wider range of people enabling them to buy their first home. Not only is this a better use of public money but it provides a welcome boost to the housing market for first time buyers.'
There will be two distinct pathways:
‘First Home Fixed’ which relates to the ‘approved’ properties, allocated by the Department to applicants on the Register of First Time Buyers; and ‘First Home Choice’ which applies to properties purchased on the open market.
The ‘First Home Fixed’ scheme targets those most in need of assistance, who have lower incomes and need greater support to meet their housing need through purchasing approved properties up to a value of £160,000.
The ‘First Home Choice’ scheme is targeted at first time buyers with slightly higher income levels seeking to purchase on the open market, giving those who would not be able to purchase a home without Government help the opportunity to get a foot on the property ladder. It provides greater flexibility for applicants by providing access to a wider choice of properties up to value of £190,000.
Member for Housing, Alfred Cannan MHK, added:
'This scheme provides a fresh approach to helping first time buyers and does not reduce affordability for the applicant. In fact for some, it will make obtaining a mortgage more viable and will result in a greater return to Government over time for continued reinvestment in affordable housing provision.'
Anyone who is interested in either the ‘First Home Fixed’ or ‘First Home Choice’ Schemes and has any queries should visit www.gov.im/firsttimebuyers or contact the Housing Team on +44 1624 685955.
