How Does a First-Time Buyer Mortgage NI Work With Co-Ownership?
Co-Ownership in Northern Ireland is a scheme managed by the Co-Ownership Housing Association.
In essence, you buy a proportion of the home and pay rent for the remaining balance to the association. This scheme is similar to Shared Ownership.
There are a few rules that you'll need to meet to be eligible:
- The first-time buyer needs to purchase at least 50% of the property through a residential mortgage.
- You can buy a more significant proportion, up to 90% as a maximum.
- When the property is bought, your lease with the association runs for 99 years and is an equity-sharing lease registered against the property.
- Applicants can choose to buy the 50% minimum and then purchase additional chunks of at least 5% each - or they can stick with the original purchase split and keep paying rent.
Rent payable through Co-Ownership is designed to be affordable. It is worked out at 2.5% of the proportion of the home that belongs to the association.
For example, if you buy 65% of a property, the association will charge rent for the other 35% proportion.
Each year the association reviews the rent charges and links this to the Retail Prices Index. It may increase each year slightly depending on inflation.
If your rent does go up, you'll be given a month's notice.
When a Co-Ownership property is sold, the proportion that belongs to the association is still theirs, so they'd be entitled to 35% of the sale proceeds in the above scenario.
Can a Mortgage Broker First-Time Buyer Expert Help Me Buy a Home in Scotland?
Yes, and there are several Scottish first-time buyer schemes available!
One option is to consider Help to Buy - this was initially available only in England but has since been rolled out in Scotland, albeit with some slight differences.
As in England, you can only use Help to Buy to purchase a new build, and the buyer can be either a first-time buyer or somebody moving home.
You'll need a minimum 5% deposit to qualify and can then borrow up to 20% of the property value from the Scottish government in the form of an equity loan.
The scheme helps because a lender is likely to offer far more advantageous terms to someone with a 25% deposit, particularly a first-time buyer, than someone who can put down 5% on the cost of buying a new property.
Here are the differences between the Scottish and English Help to Buy schemes:
- In Scotland, there is zero interest payable on the equity loan, no matter how long has passed since you applied - in England, you start paying interest if you haven't refinanced the loan in five years.
- Scottish Help to Buy properties are capped at £400,000, compared to £600,000 in England (note that caps differ between London and the rest of England).
Are First-Time Buyer Buy to Let Mortgages Available Throughout the UK?
Yes, there are mortgage lenders who offer products to applicants throughout the UK.
Others focus on a specific region, so a local lender might only consider properties in Scotland or Wales, for example.
However, a whole-of-market broker can help regardless of where you're based and where you'd like to buy a home!
How to Get a Mortgage First-Time Buyer in Wales
In Wales, the schemes are different again. One of the best first-time buyer initiatives is called HomeBuy, funded by the Welsh government.
Local housing associations and councils manage this programme. Still, it isn't available in every area since only councils with a designated housing association in the district can offer the scheme.
HomeBuy is aimed at people in Wales with low incomes, so anybody in this category can apply, whether or not they are first-time buyers.
If you apply, you'll need to provide evidence about your income. Acceptance means that you meet the conditions to be categorised as low-income for the mortgage application process but have demonstrated affordability.
Applicants for the Welsh HomeBuy scheme cannot be in rental arrears, receive housing benefits, or have been benefits recipients within 12 months of applying.
HomeBuy does allow people to purchase a property with a joint applicant. Still, in this situation, they'll apply the same income measures to determine whether you qualify - so you'll need to have a combined income that means you wouldn't be able to purchase the home without help.
Using HomeBuy as a First-Time Buyer in Wales
Like the Scottish support initiative, HomeBuy means you can borrow from the housing association. In this scheme, you can borrow between 30% and 50% of the property value.
The balance of the purchase cost needs to be covered with a residential mortgage from a recognised lender, i.e. a bank, building society or another legitimate lender.
Contact Revolution if you're interested in applying and need to know which mortgage providers offer HomeBuy mortgages in Wales.
There are no monthly repayments required towards the loan - it remains in situ until the property is sold.
The amount payable will depend on how much the property is now worth on the market when you sell the property.
For example, if the HomeBuy loan was for 40% of the property value, you'll need to repay 40% of the sale price if you sell.
Help From the Leading First-Time Buyer Mortgage Advisor
For any more information about the first-time buyer schemes in Northern Ireland, Scotland or Wales, give the mortgage brokers team a call on 0330 304 3040 or drop us a message at [email protected].
With years of experience supporting our clients, we'll evaluate the options available and help you find the most suitable first-time buyer mortgage in your chosen UK region.
2023-05-09 
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