The Homestep scheme has been created because Rhondda Cynon Taf County Borough Council and its partners recognise that first time buyers can often find it difficult to get on to the first step of the property ladder. To see what properties we currently have available, please visit our Housing Solutions Website.
Homestep is unique to Rhondda Cynon Taf County Borough Council and is operated by the Housing Strategy Unit. We work with partner Housing Associations, private House Builders and the Welsh Assembly Government to provide Low Cost Home Ownership products to people who are in a financially stable position yet still unable to purchase a home outright without assistance.
How does Homestep work?
There are 2 ways to purchase a home with us.
Discounted Market Sale
These are new build houses where the Council has worked with the Developer to make them more affordable to buy. You buy the house at a percentage of its full market value. A restriction is placed on the title of the property that requires that upon the re-sale of the property the sale price shall be no more than the value of the initial percentage. The percentage that is available for you to buy will vary between each development but is usually 75%.
For example, if a property costs £120,000 you would pay 75% of this, i.e. £90,000. If you resold the property in the future and the property was valued at £150,000 you would only be able to sell 75% of this, i.e. £112,500.
When you sell the property the Council will arrange for you to sell it to someone on the Homestep register. This ensures that the property will always remain available for affordable home ownership. If there is no one on the register at the time you wish to sell that is interested in purchasing your property then you will be able to sell it on the open market but will still be restricted to selling it for no more than the value of the initial percentage e.g 75%.
Shared Equity Schemes
These are new build houses where the Council has worked with the Developer to make them more affordable to buy. You buy the house (usually) at 75% of its full market value. The Council or a housing association retains the remaining 25% share of the freehold value of the house. This means that you only need a deposit and mortgage for 75% of the value of the property. You do not pay any rent on the 25% equity share retained by the Council, however, if you sell the property in the future, the Council or the housing association would receive 25% out of the open market sale price at the time of sale.
Alternatively, you also have the option of purchasing the Council’s equity share of the property (after a minimum period – usually this is 12 months), based upon the percentage share of the open market value.
We aim to assist as many people as possible.
To be able to apply in the first instance you must:
Be over 18 years of age
Be a UK passport holder or have Indefinite Leave to Remain in the United Kingdom
Be able to raise a mortgage with a suitable mortgage lender
Have access to enough savings to cover the costs of buying a home, such as solicitors, mortgage arranging and survey fees.
We give top priority to people who are:
Current tenants of the Council or a Housing Association in Rhondda Cynon Taf
Registered on the Common Housing Register or any other waiting list held by a Housing Association in Rhondda Cynon Taf
We can also assist people who do not fall into either of these categories but can demonstrate a local connection to Rhondda Cynon Taf e.g. currently live or work here, previously lived here or have family that lives here.
Although Homestep is targeted toward first time buyers we may still be able to help you providing you do not currently own a property. You will be considered if:
You previously owned a home with a partner and the relationship broke down
You need to move to the area due to a job relocation
How much do I have to earn?
Although there are no minimum income restrictions for Homestep you will need to demonstrate to us that you can afford to purchase a home and have sufficient resources to cover the cost of purchasing a home.
As a homeowner you will be responsible for all the usual running costs of the property such as mortgage repayments, utility bills, repairs and general upkeep. You will need to be in a financially stable position to do this.
If you are interested in purchasing a property that is advertised through Homestep you will be invited to an affordability interview where your financial circumstances will be assessed and a Homestep Officer will check that you can afford the mortgage for your share of the property. You will not be able to proceed with the purchase until a Homestep Officer has undertaken this process and approved your affordability.
Is there a limit on my earnings?
We will be unable to accept your application if your income or savings are high enough to purchase a similar home outright on the open market.
How are properties affordable?
There are various ways to purchase a home with us. Products will vary depending on the availability of funding.
Homestep offers buyers the opportunity to buy part of a property either at a discounted price or by an equity share being retained by a housing association or the Council at no extra cost to the first-time buyer. This makes the property more affordable. The share of the property that you would need to purchase will vary between each development, but is usually 75% but may be lower. Properties are often available through the scheme on new housing developments, but can also be individual older properties depending on available funding and how the properties have been secured for low cost home ownership see information on our Homestep Plus scheme.
What happens if I wish to sell the property in the future?
If you wish to sell the property in the future it will depend upon whether your property was bought through discounted market sale or a shared equity scheme. For instance on discounted market sales you will only be allowed to sell the share of the property that you own e.g. 75%. This way the home will remain affordable to buyers in the future. For equity share sales the property can be sold on the open market and the Council or Housing Association holding the remaining equity share will be paid from the sale price.
What should you do next?
Fill out the Homestep application form in full and return it to us as soon as possible. When completing your application it is important to provide as much information as possible so we can process your application quickly and correctly.
If you need assistance with completing the application form please do not hesitate to contact us. Our staff are here to help and aim to provide you with a friendly and professional service.
If you are eligible to join the scheme, you will be accepted onto the Homestep register and notified accordingly. Once you are on the Homestep register you will be notified of any new properties that may become available and you will be asked to express your interest in them. You will then be prioritised according to the Homestep criteria and may be asked to attend an affordability interview. If you are approved at this stage, you will then be nominated to purchase a property.
Other Options for First Time Buyers
The Council is also working in partnership with Lloyds TSB to help first time buyers onto the property ladder to purchase homes on the open market (this scheme is not available through the Homestep Scheme)
Subject to Lloyds TSB's usual lending criteria, borrowers are able to select any existing property in the area covered by Rhondda County Borough Council up to a maximum loan of £95,000. First-time buyers will put down a minimum 5% of the property price, and the Council will provide a cash backed indemnity of up to 20% as additional security. Unlike Homestep the first-time buyer owns the property in its entirety and is available for existing properties.
Subject to Lloyds TSB's usual lending criteria, borrowers are able to select any existing property in the area covered by Rhondda County Borough Council up to a maximum loan of £95,000. First-time buyers will put down a minimum 5% of the property price, and Rhondda County Borough Council will provide a cash backed indemnity of up to 20% as additional security.
They will also have access to a range of products at a lower rate of interest than would normally be available for this level of deposit.
To find out more information please call into any local branch of Lloyds in Rhondda Cynon Taf area. To find your local branch you can check online or ring 0845 3000 000
Housing Strategy, Ty-Elai, Dinas Isaf East, Williamstown, Tonypandy. CF40 1NY
Telephone: 01443 425388 Email: email@example.com