HomeBuy (sometimes referred to as Keyworker HomeBuy, Starter Home Initiative HomeBuy or Open Market HomeBuy) was a scheme which allowed applicants to buy a home of their choice on the open market with the help of an equity loan from us.
The loan was calculated as a percentage of the property value and secured against the home as a second charge. This means that you’ll need to contact us if you:
- Are selling the property and paying back the equity loan
- Are remortgaging the property
- Are carrying out home improvements
- Would like permission to sublet the property
- Are extending the lease or purchasing the freehold
- Are changing, removing or adding names to the deeds.
Managing your HomeBuy loan
Sell your property, repay your loan
You'll need to repay your HomeBuy equity loan when you sell your property, but you may also wish to repay the loan and remain in your home.
How much do I owe?
We’ll work out what you owe by calculating the original percentage you borrowed at the current value. If you carried out home improvements which added value, we will use the unimproved value.
How do I repay?
You should send us:
- Open market valuation by an independent Royal Institute of Chartered Surveyors surveyor (RICS, FRICS or MRICS)
- A completed HomeBuy loan repayment request form
- A solicitor to deal with the transaction.
When we have these, we’ll calculate what you owe and write to you and your solicitor to confirm this.
You’ll need to repay the loan before your valuation expires (usually 3 months from the date of inspection). If your valuation expires before you repay, you can ask your surveyor to provide a desk top valuation, however after this, you may need to pay for another inspection.
Remortgage your property
Because we hold the second charge, you’ll need our permission to remortgage. We’ll only agree to this if you are:
- Carrying out home improvements or essential repairs and maintenance to your home.
- Changing your lender (but only up to the value of the original loan)
- Repaying your loan or buying another party out.
How much can I borrow?
We’ll give permission for you to borrow up to a maximum of 75% of your equity share of the headroom. The headroom is the increase in value between the market value at purchase and the current market value of the property.
How do I remortgage?
You should send us a completed remortgage request form.
When we have this this, we’ll write to your lender and ask them to confirm some details and send us their deed of postponement. We will need to sign the deed of postponement and send it back to them before they can complete your transaction. Download a list of our recommended surveyors panel valuers.
If you are remortgaging to buy another party out you should still send us a completed remortgage request form and ask your solicitor to send us a completed TR1 form (Transfer form) which we will sign and return to your solicitor for them to register with the Land Registry.
Carry out home improvements
Your loan agreement says that you must get our permission for any home improvements you carry out, if you wish for the value they add to be considered when you pay back your loan.
It’s important to remember that essential repair and maintenance is different from a home improvement and the amount you spend making improvements will not necessarily be the same as the value they add. When you come to repay, it will be up to the qualified surveyor to decide if the work you’ve done is an improvement and the value it has added.
Though you can ask us after you have finished your home improvements, we strongly recommend that you speak to us beforehand, to help avoid any disputes. When you come to repay the loan, only improvements where our written permission has been given will be considered.
How do i get permission for home improvements?
You should put your request for our permission in writing, enclosing evidence of the work you are requesting permission for. This can be in the form of quotations from contractors or receipts for materials. We won’t be able to give you our permission if the work you are carrying out cannot be evidenced.
If you wish to remortgage to pay for your home improvement, you should complete a remortgage request form found in our ‘Remortgaging your property’ section.
You cannot back date any future requests to remortgage to consolidate costs incurred whilst carrying out home improvements, maintenance or repairs.
- Depending on the type of home improvement you are carrying out, you may also need to:
- Ensure you have the relevant planning permissions or Local Authority approval if required.
- Consult your freeholder to ensure you are meeting the terms of your lease, if your home is leasehold
- Take photos of the work you do to present to the surveyor when you come to repay your loan.
Sublet your property
Permission to sublet is only granted in exceptional circumstances and is not intended as a long-term option for people who have purchased under the HomeBuy scheme.
If we give our permission for you to sublet, it’ll usually be for a maximum of 12 months. At the end of the 12-month period you must either return to live at the property or make arrangements to sell it.
If you would like us to consider giving you permission to sublet, you should:
- Write to us, setting out why you wish to sublet your property and evidence to support this, if appropriate
- Provide us with confirmation from your mortgage lender that they will allow you to rent out your property. This should be on headed paper with contact details. Failure to notify your lender is a breach of the terms of your mortgage
- Provide us with confirmation of the amount of rent you would expect, preferably supported by a letter from a professional lettings agency
- Provide us with an estimated budget of the property outgoings, e.g. mortgage payments, service charges, council tax, etc, to show that the rent will cover this
- Provide a copy of the proposed tenancy agreement, which should be in the form of an Assured Shorthold Tenancy
- Provide evidence that adequate insurance in place to cover any damage caused to the property by any tenants.
Change, remove or add names
To change, remove or add names to the deeds of your property, you will need to instruct a solicitor.
Your solicitor will need to contact us about changing the loan agreement and provide us with a TR1 form (Transfer form). We'll sign the form and return it to your solicitor who will register the change with the Land Registry.