FAQs

Help to Buy FAQs

Look out for the Help to Buy logo! You’ll see it on all Optivo new build developments where Help to Buy is available.

No, if you can afford to buy the home with a smaller loan borrowed then you are able to do so. You will need to borrow a minimum 5% equity loan to be eligible for the scheme.

The scheme is available to help people buy a new home who could not have afforded to do so otherwise, therefore the home you buy must be lived in by you.

 

If, for example, a friend moves in the spare room, as long as there is no formal rental contract in place and you can afford to buy the home without their additional income of rent, this would usually be ok.

No, Help to Buy and Shared Ownership are two different schemes that cannot be combined.

No, Help to Buy is designed to assist those to buy a new home that could not have afforded to do so otherwise, therefore cannot be used for Buy to Let purposes.

You must be a first time buyer and have not owned a property previously. This also applies if you are buying the property with someone else; both of you must qualify as first time buyers to obtain the Help to Buy Equity Loan.

Unfortunately not. If or when you want to buy a new home in the future, your existing equity loan will be paid off via the sale of the property or at the end of the mortgage period- whichever comes first. While previously you may have been able to apply for a new loan upon buying a new property under the scheme, this is no longer possible as the criteria for the loan from 1st April 2021 now requires you to be a first time buyer. This is to ensure that those who would most benefit from the loan get top priority.

To buy a home with Help to Buy from Optivo, discover our range of homes on offer at optivosales.co.uk. Once you’ve found a development or home which is available with Help to Buy, get in contact and our sales team will guide you through every step of the process.

 

The first step is applying for the loan, which will include an initial affordability assessment that will be approved, or declined, by the Help to Buy Agent. This assessment will be carried out by an independent financial advisor, however they need to ensure the purchase is affordable for you both now, and when the interest is applicable on the loan.

The Help to Buy equity loan is interest free for the first 5 years. As of year 6, an interest rate of 1.75% plus RPI at the time will be charged and you will need to pay this on a monthly basis. The interest you pay will be based on the value of the loan you borrowed at the time of buying your home.

 

Make sure you consider and plan for the additional monthly costs, alongside your mortgage and any potential service charges, and our post-sales agent will contact you with a few months notice before the interest needs to be paid. While you don’t pay back the loan monthly, it can be paid through a minimum of 10% instalments or in full if and when you have the funds such as upon selling.

You are considered 100% owner if you buy a home with Help to Buy, therefore you are completely free to decorate as you wish. There are some home improvements, such as extensions or other structural changes to the property, that you will need to get permission for via our post-sales agent.

Unlike Shared Ownership, no company or organisation owns the 20% (40% in London) that you didn’t buy with a deposit and mortgage, therefore you will need to sell your home via a more traditional route of an estate agent.

 

You will need to let our post-sales agent know when you are selling as they will need to approve certain aspects of the sale, including the valuation of your home.

The equity loan is interest free for the first 5 years, however you will typically have 25 years (or for however many years you took out your mortgage for, up to a maximum of 25 years) to pay back the loan.

 

For example, if you took out a mortgage term of 25 years, you will have 25 years to pay back the loan. If your mortgage is to be paid off within 20 years, you will have just 20 years to pay back the loan, however if you borrow your mortgage over 30 years, you will have the maximum period of 25 years to pay back, or ‘redeem’ the equity loan.

The loan can be paid back in full either on sale of the property or in ‘chunks’ of 10% at a time. You cannot pay off part of the loan monthly, for example, as you would with a credit card.

 

Our Help to Buy post-sales agent will process the transaction for you, in the same way that a Help to Buy Agent helped with the initial purchase. Fees will be applicable but our post-sales agent will provide information on this.

Help to Buy enables you to borrow a percentage of the value of a new home, not a specific monetary amount, therefore if the value of the home has increased when you come to redeem part of all of the loan, you will pay back the same percentage but based on the current value.

 

For example, if you buy a new home for £300,000, you will borrow a 20% equity loan of £60,000. If the value increases to £350,000 when you come to pay the loan back, you will be paying back £70,000, however the 80% of the financial contribution you put towards the home via a deposit and mortgage will still benefit from the increase in equity:

 

80% contribution of £300,000 = £240,000

 

80% contribution of £350,000 = £280,000

Yes! If you can afford to pay back, or redeem, the loan with the 5 year interest-free period, you are able to do this.

London Living Rent FAQs

To find a home with London Living Rent from Optivo, discover our range of homes on offer optivosales.co.uk and search by LLR. Once you’ve found a development or home which is available with London Living Rent, get in contact and our sales team will guide you through every step of the process.

Your actual rent will vary depending on the size of the home you rent, and which borough you will be renting in. Your rent is based on a third of average local household incomes and adjusted for the number of bedrooms in each home, but your rent will be capped at no more than 80% of a market rent figure for that home in that area of London.

 

For example, the average monthly rent for a 2 bedroom home being offered with London Living Rent is £1,030 per month.

The homes will be offered on tenancies of a minimum of three years.

If you are unable to, or choose not to buy the home you have been renting with London Living Rent after 10 years, your landlord may sell the home to another potential buyer via the Shared Ownership scheme.

To be eligible for a London Living Rent home, you must:

  • Be currently renting in London

  • Have a maximum household income of £60,000 

  • Be unable to currently buy a home (including through Shared Ownership) in your local area

 

Shared Ownership FAQs

This is likely to have an impact on how likely a mortgage lender will say ‘yes’ to letting you borrow money for the mortgage. This doesn’t mean you don’t qualify for Shared Ownership, but it could mean that you cannot get a mortgage, and therefore cannot afford to buy a home. A financial or mortgage advisor will be able to help you with this, or you can check your own credit score online before applying, often for free.

When buying a Shared Ownership home, it must be your one and only property owned, including any property overseas.

 

However, if you are selling your current home and cannot afford to buy a new home without the assistance of Shared Ownership, you may still be eligible. For example, you might currently own a one bedroom apartment but cannot afford to buy a bigger home, or following a relationship separation you now need to buy a home by yourself and cannot afford to do so without the assistance of the scheme; Shared Ownership could be what you’ve been looking for.

This will depend on the terms of your lease. Broadly speaking, if you share a communal front door, for example to an apartment block, typically pets are not permitted. However, there’s also a big difference between owning a large dog versus a hamster so we recommend always checking with the housing association first.

Shared Ownership mortgages are usually a minimum of 5 or 10%, based on the value of the share, not the full market value.

 

So, if you were buying a 25% share of a £300,000 home for £75,000, you’ll need to have a minimum of £3,750 (5% of £75,000) for your mortgage deposit. Versus a 5% deposit of the same home but buying it outright, you’d need to have savings to cover £15,000 so Shared Ownership can be a much more affordable, and achievable, route to owning your own home.

 

You’ll also need savings to cover initial purchase costs such as mortgage and solicitors fees.

 

To reserve your chosen home, you’ll also need to pay a reservation fee. This will secure the home as yours until a formal offer is made, so that we can allocate you the home. This figure is deducted from the purchase share price. If you decided not to proceed with the purchase we would retain this fee towards administrative costs.

Buying a Shared Ownership home should be affordable in the long run, not just the short term; that’s why at Optivo we are required to check your financial situation, including understanding your monthly income and your outgoings. A financial check, or ‘assessment’, will be carried out before an offer is made because let’s face it, no one wants to live in a new home if you can’t then afford to enjoy it!

 

An independent financial assessor will help to see how much you can borrow for your mortgage, what deposit you’ll need, and what your interest rate will be; this will be based on your household income (salaries and any other regular income), any monthly payments on debts such as loans or credit cards, as well as other regular monthly outgoings such as child maintenance or contractual payments. Your credit score will also be used to find the right mortgage lender for you. Knowing how much you have in savings to put towards your deposit will then help the advisor, Optivo, and just as importantly, you, to establish what percentage share you can buy.

The specific monthly amount will depend on what you buy, for what value, and where, however monthly costs will include your mortgage repayment, rent on the remaining unpurchased share, service charges, and other ‘standard’ living costs such as utility bills, council tax and home insurance.

Staircasing simply means buying more shares of your home. The more of the home you own, the less rent you’ll be paying each month.

 

You’ll normally be able to buy a minimum of 10% more in your home, or if you can afford to, buy the rest of the home so you then own 100% (or anything in between!). The value of the additional share you buy will be based on the full market value of your home at that time, not the original purchase price.

 

Normally there’s no restrictions on when you can buy more of your home, but remember there will be costs to pay such as solicitors fees, so it’s often best to buy as much as you can afford from the start.

Yes, they are both subject to an increase (or decrease) annually, but at Optivo we are required to give you at least 4 weeks notice of any changes, or as per the terms in your lease.

 

Unlike privately renting, renting from Optivo, a housing association, means we are closely regulated to ensure your rent portion of your monthly outgoings will not suddenly jump, just ‘because’; it will normally be in line with any inflation and costs of living changes.

Child maintenance payments cannot be used as ‘income’ towards monthly costs, however some other payments and benefits may be able to be used towards the rent on the remaining unpurchased share.

 

For example, if you are able to buy the share ‘outright’ with a cash lump sum, you may be able to use Housing Benefit towards or to cover the costs of the rent on the share of the home you don’t own. Get in touch with us and/or an independent mortgage advisor for full details before applying for Shared Ownership.

If buying a home in London, just contact Optivo directly to register your interest in Shared Ownership, but for the rest of England, you’ll need to also apply to the Help to Buy agent for the area you want to live in.

There are a few factors that will impact how long it takes to go from viewing the home to getting the keys. If the home is ready to move into immediately, the process of buying a home will usually take between 6 - 10 weeks, but can depend on how quickly your chosen solicitor and mortgage provider processes paperwork so it’s important to pick both solicitors and mortgage/financial advisors that understand Shared Ownership, or it could cause delays. With Optivo, you’ll be provided a list of recommended advisors who are familiar with the Shared Ownership process.

If you are buying a new home, you may be buying off-plan without getting to view the actual home you intend to buy. This is completely normal and you’ll have a thorough explanation of the layout of the home via floor plans with dimensions, or by also viewing a show home. This may be up to 6 months ahead of when the homes are ready to be moved in to, so you’ll have plenty of time to plan the decor (and continue to save to buy new things for when you do get the keys!).

If you are buying a resale home, this means you are likely to be in a ‘chain’. This means the current owner, known as a vendor, will be moving into another home so that buying process also has to be taken into consideration, however the chain will be made clear at the start of the buying process.

Check with the team at Optivo, but often your buildings insurance is included in your monthly service charge; this means you may only need to arrange contents insurance but always ask first!

 

As a shared owner, you’ll have the responsibilities like any other home owner; this means you’ll need to cover minor, or day-to-day repairs and maintenance such as changing light bulbs, keeping your boiler serviced, or fixing any white goods such as a washing machine should it break.

 

Unlike renting, Shared Ownership means you don’t need to ask permission to paint the walls or hang a new photo, but any major home improvements you must ask us for written consent to the improvement or structural alteration that you want to make.

A monthly service charge will vary, depending on the home you buy. For example, buying an apartment with a lift, concierge and resident gym will cost more than an apartment without! If you buy a house, there may still be service charges but we will be able to give you a breakdown of the costs.

 

Broadly speaking, communal areas are covered in your service charge and therefore the maintenance is organised and run by Optivo or management company.

Shared Ownership is designed to help people buy a home that cannot afford to do so without the help of the scheme. Essentially, if you buy a home with Shared Ownership, you need to live in it and cannot sublet. There may be some case-by-case situations that we will consider, such as a short-term relocation for work, so always speak to us in the first instance.

 

If, for example, you buy a two bedroom apartment with Shared Ownership and a friend moves into your spare room, this is usually permitted as long as no formal letting agreement or contract is in place, and you can afford to buy and live in the home without the additional income of a friend renting the room or contributing towards the bills.

You may sell your share at any time but you must tell us that you want to move. Your lease may have clauses that allow us to nominate a prospective purchaser and you may be required to have your property valued to determine the sale price of your share.

 

You will benefit from any increase in the value of the shares that you own but you must be aware that you will also be affected if the value of your share falls. So, if you purchased 25% but bought more of the home and you now own 40%, the new buyer could only purchase 40% or more in your current home.

We list both new homes and resales on our website which showcases your Shared Ownership home to thousands of potential buyers, just like you right now! So, if you have the right home, in the right place, at the right price for someone else looking to buy with Shared Ownership, chances are you’ll have a buyer in no time.

The eligibility criteria for Shared Ownership is simple; as long as you don’t currently own, or won’t own another property when you move into a new home, you’re likely to qualify. Your annual household income (that's both yours and anyone else contributing to mortgage payments) can’t exceed £80,000 (£90,000 in London) and you’ll need to have savings to cover purchasing costs such as solicitors fees and your mortgage deposit.

 

There’s no minimum income, but we help arrange a financial assessment to determine whether you can afford to buy the home and we always suggest a guidance income for every property. No age restrictions (although you need to be able to secure a mortgage). It doesn’t matter what you do for a living. Buying on your own, with a partner or friend or you have children, there could be a Shared Ownership home just for you with Optivo.

Some local authorities or boroughs may require you to have a ‘local connection’ before you can buy the home; this normally means that you must live, and/or work in that area.

 

If there is no specific connection requirement, Ministry of Defence (MOD) personnel will receive priority to buy with Shared Ownership. This means:

 

Current military personnel:

  • You must have completed your basic (phase 1) training and are either regular service personnel (including Navy, Army and Air Force)

  • Clinical staff (with the exception of doctors and dentists)

  • Ministry of Defence Police Officers or uniformed staff in the Defence Fire Service

 

Ex-military personnel:

  • Have served in the Armed Forces for a minimum of six years and they apply to buy within two years (24 months) of the date of discharge from service will also be prioritised. You must also produce a Discharge Certificate (or similar documentation) as proof

  • Surviving partners of Regular service personnel who have died in service where they apply to buy within two years (24 months) of the date of being bereaved.

  • If you don’t tick the above boxes, don’t worry! Many homes across the country don’t require you to have a connection to the area, or matter what you do for a living.