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Buying a low-cost home

Buying a home in Newham is unaffordable for many residents. If you would like to buy a home in the borough, there are a number of schemes to help you.

Shared ownership

With a shared-ownership scheme, you buy part of your home and rent the rest. The share of your home that you have to buy will depend on the scheme, but typically, you will have to buy at least 25 per cent of your home.
At the time you buy, you will also pay a rent which is based on the value of the rest of your home.

Qualifying for shared-ownership schemes

To qualify for a shared-ownership scheme you will need to:
  • have the deposit and
  • be able to pay the legal fees for buying a property.
You will also have to meet other criteria which are set by the scheme.

Buying the rest of your home

When you can afford to, you can increase the share you own. This is known as 'staircasing'. The cost of this extra share will be based on the current value of your home – not the value of your home at the time you joined the scheme.
Buying an extra share will cut your rent. You can ‘staircase’ to the point where you own all your home and no longer pay rent.

Find a shared-ownership home

You are most likely to find a shared-ownership home through a local housing association. You can apply for shared-ownership housing through Homematch.

Shared equity

With a shared-equity scheme, you buy all of your home using a smaller mortgage and deposit than if you were buying your home through a mortgage provider. You will make up the difference with an equity loan which will cover  a percentage of the value of your home.
Equity loans can be offered by house builders, councils and as part of government initiatives to help first time buyers onto the property ladder.
The equity loan provider will own a share of your home until you have paid back the equity loan or you sell the property.

Paying back your equity loan

Your shared-equity scheme will set out when you have to start paying the loan back and by when it has to be repaid. Most schemes let you repay the loan in stages which reduces the fee payments.
The value of your equity loan generally fluctuates with the value of your property, and so the amount you will pay depends on the value of the property at the time you repay.

Selling a shared-equity property

If you sell your home before you have repaid all of your equity loan, the loan provider will be entitled to their share of the value (equity) of the property at the time you sell.
If you have repaid part of your equity loan, the provider’s share in your property will be less than it was when you bought your home.

Find a shared-equity home

You may be able to buy a shared-equity home through our NewShare scheme.

Help to Buy

With Help to Buy, you can buy a new home on an approved new build development with financial help from the Government.

To qualify for Help to Buy:

  • you must take out a mortgage with a qualifying lender such as a bank or building society
  • your mortgage and any deposit you have saved must come to at least 80 per cent of the price of the home
  • the price of your home must not be more than £600,000
  • you will have to pass an affordability check.

How Help to Buy works

The Government will give you an ‘equity loan’ for the balance (up to 20 per cent) of price of your home that is not covered by the deposit and mortgage.
You will not pay any interest on your ‘equity loan’ for the first five years. After that you will pay a fee on the loan of 1.75 per cent which will rise each year by the Retail Price Index (RPI) plus 1 per cent.
You will own your home outright and you will be able to sell it whenever you like but you will have to pay back the full value ‘equity loan’ to the Government when you sell.
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