A new approach to home ownership has been launched today that will benefit young and old alike across Scotland.
Home Ownership Made Easy (HOME) is a new and easier route to home ownership for first-time buyers and also offers an alternative option for older home owners who want to move to a house that is right for their needs.
HOME has been devised by infrastructure and housing experts, the Scottish Futures Trust (SFT).
It is a way to deliver affordable housing for local authorities, housing associations and developers that does not require any subsidy and is fully self-funding.
This week North Ayrshire Council, in partnership with SFT, launched its first HOME development in Scotland.
The pilot scheme will see North Ayrshire Council build 33 properties on the site of the former St Mary’s Primary School in Largs.
For young, first-time buyers, the houses will be offered for sale for £5000. For older people looking for a home to meet their changing needs, homes will be sold for £40,000.
The £5000 Home
First time buyers will be able to purchase their new home for £5000. This sum secures a stake in a house or a flat and all the rights that come with being a home owner with fewer responsibilities. It is aimed at those who have some savings but might be struggling to pull together enough for a full deposit. It will also be ideal for people that work but are finding it difficult to get mortgage approval.
The £40,000 Home
Under HOME, older owner occupiers will also be able to purchase a home for just £40,000. This is an new option for home owners who do not have enough equity to buy the right property for themselves on the open market but who want a modern, desirable, manageable home.
Christa Reekie, commercial director at the Scottish Futures Trust (SFT), explained: “Increasing the supply and improving the quality of housing across Scotland remains a key priority for us. SFT’s housing experts worked alongside North Ayrshire Council to develop this new housing model for first time buyers and older people looking to downsize. As well as benefitting many individuals, the new ownership model introduces more homes that will be affordable to buy.
“We are confident more local authorities and other interested parties will quickly follow North Ayrshire Council’s lead in this new initiative, once they see the benefits.”
North Ayrshire Councillor Jim Montgomerie commented at the launch of HOME: “This has the potential to be a real, ground-breaking project and one that offers a real, affordable alternative for those who are struggling to buy their own home or find themselves stuck in a house which is perhaps too large to maintain.”
The £5000 Home
First time buyers will be able to purchase their new home for £5000. This sum secures a stake in a house or a flat and all the rights that come with being a home owner with fewer responsibilities. It is aimed at those who have some savings but might be struggling to pull together enough for a full deposit. It will also be ideal for people that work but are struggling to get mortgage approval.
Having secured their home with their £5000 stake, homeowners will then pay an affordable monthly payment (an occupancy fee) that covers the provision of a significant management and maintenance package. This package covers all items that are the most expensive to replace or repair, like boilers, rooves and windows, giving the part owners peace of mind. In Largs, these repairs will all be carried out by North Ayrshire Council, who retain the rest of the share in the property. Meanwhile, individuals get to decorate and fit out their home to their own tastes and sell their £5000 share when they are ready to move on.
In this way, the £5000 Home allows first time buyers “test” home ownership without having to take out a full mortgage, make a big upfront payment or worry about repairs and maintenance. The low occupancy fee should enable them to save for a deposit and go on to buy on the private market if they wish to do so.
The £40,000 Home
Under HOME, older owner occupiers will also be able to purchase a home for just £40,000. This is a new option for home owners who do not have enough equity to buy the right property for themselves on the open market but who want a modern, desirable, manageable home.
The £40,000 Home allows them to buy a stake in an attractive, accessible, affordable property. A low monthly payment (the occupancy fee) covers the same sizeable maintenance and management package, giving peace of mind while making sure that the grass is cut and their building is well looked after.
As well as providing a new route to delivering affordable homes to those that need it while addressing the housing needs of Scotland’s ageing population, SFT has ensured that the HOME tenure is affordable to those that purchase a stake in perpetuity.
Occupancy fees will rise in line with inflation. Prospective buyers can only pay for their share in cash, eliminating the risk of the value of the share detaching from the value of the property. Moreover, sales and purchases of shares can be made directly between individuals without the costly and drawn out process of advertising the properties through agents.