Homebuy Pembrokeshire

What is Homebuy Pembrokeshire?

Homebuy Pembrokeshire is an affordable housing product provided by Pembrokeshire County Council that helps first time buyers to purchase a property in Pembrokeshire.

 

How does it work?

Homebuy Pembrokeshire can lend up to 40% of an open market property value. You will pay no interest or charges against the loan, but is paid back when you sell the property, or by making an earlier repayment.

The value of the loan is linked to the current market value of the property.

If the property goes up in value while you own it, this will be reflected in the amount you owe on your loan. 

 

Is it suitable for you?

Homebuy Pembrokeshire has been created to help those who would like to buy their own home, have access to a mortgage and have saved for a deposit, but still find that they struggle to afford a suitable home.

It aims to give people with a local connection to Pembrokeshire the chance to access the housing market, and where possible buy a property in their preferred area of the county.

This helps to address these two key issues for first time buyers in the county. 

 

Who classes as a first time buyer?

A first time buyer includes someone who:

• has never owned a home or land, or
• has owned a property previously, but was sold due to a relationship, marital or civil partnership breakdown.
• has suffered financial difficulty that has resulted in the sale of their home.

 

Who qualifies?

To be eligible for this loan, there are some criteria the you will have to meet.

• You must be able to show that you cannot afford to buy a suitable property without the support of Homebuy Pembrokeshire.
• Are 18 years of age or over.
• Do not own a property or land elsewhere.
• You can prove that you have a local connection to Pembrokeshire.
• You have a deposit of between 5% & 15% available.
• You have secured a mortgage that will cover the purchase of the property, less your deposit and the Homebuy Pembrokeshire loan.
• Have an joint gross annual household income of £65,000 or less.

 

What property will be considered?

• Has a market value of £275,000 or less
• It is for sale on the open market.
• The property must be in Pembrokeshire.
• It is not currently owned by a friend or family member.
• Is not a new build property, being sold by, or on behalf of a developer.
• Optional registered empty properties may also receive extra loan.

 

Local connection

An important part of Homebuy Pembrokeshire is to provide people that have a local connection to the area a chance to buy a home. Applicants will need to provide evidence that you meet one of the following criteria:

• Have lived in the area as their only or principal home for the last 3 years, or
• Have previously lived in the area for at least 5 of the preceding 10 years, or
• Have a close family member (grandparents, parents, siblings, adult children, aunts, uncles, nieces, nephews), who currently lives in the area and has lived in the area for the last 3 years as their only or principal home; and they provide support to a member of your household or receive support from this close family member.
• Have a child in school for the last 12 months, or
• Have permanent employment (at least 16 hours per week pro rata) which is based in the area for the last 12 months this includes seasonal work. Consideration will also be given to members of the RNLI, Fire Service or Coastguard who need to live close to work.

 

What loan will be available?

The loan available will be either 20% or 30% of the current market value of the property you would like to purchase, with the rate of loan decided by where the property is in the county.

The scheme offers buyers the chance to buy a property in an area they would like to live, or have a connection, understanding that some areas in Pembrokeshire can be more expensive, and less affordable than others for a similar property.

Homebuy Pembrokeshire therefore offers a higher loan rate in areas that have a higher house price. The property must still be affordable to you and meet the Homebuy Pembrokeshire criteria to qualify.

 

Empty homes

An additional 10% loan may be available if you choose to purchase an empty property that has been registered as empty with HM land registry for at least 6 months, and it is of a conditions that you are able to secure a mortgage to fund the balance of the purchase.

 

How much will I repay?

You will have no interest to pay against a Homebuy Pembrokeshire loan. Instead, the loan is secured against the property you are buying as a Legal Charge. This means that it will be recorded with HM Land Registry that Pembrokeshire County Council has a financial interest in the property, and if sold or ownership transferred, this would need to be repaid in full before ownership is transferred.

The loan is a percentage value of the property and linked to the current housing market. If the value of the property goes up because of an improved housing market or by you carrying out home improvements, this will be reflected in the value of the loan.

For example. If the house was purchased for £150,000 using a 30% loan (£45,000) by Homebuy Pembrokeshire and the value increases by 10% to £165,000, the value of the loan would increase by 10% to £49,500.

If you carry out significant work to the home, for example the addition of a conservatory or extension, that results of an increase in property value, this will also be reflected in the value of the loan owed to PCC.You would need to get permission from PCC before carrying out and structural changes to the property.

If the value of the property drops below the original purchase price, you will be required to repay the original loan value.

 

Loan repayment

The maximum term of the loan is 25 years, with the affordable Housing Team working with you to pay sooner. There are few ways that you can make a payment against the loan. This includes: Full or part payment and resale.

• Full payment - A single payment that repays the whole loan.
• Part payment - An agreed payment of at least 5% of the property value, that may be increased in increments of 5%
• Resale/transfer - Repayment of any outstanding loan upon resale of the property or transfer.
• A repayment cannot be made in the first 12 month of ownership.
• Before any repayment is made, You will need to arrange a valuation of the property. This must be sent to the affordable Housing Team who will assess the report and provide a repayment amount.

You cannot set up an monthly payment plan for this product.

 

How to apply

Stage 1 - Expression of interest

You must contact the Affordable Housing Team to express your interest in the Homebuy Pembrokeshire. We will carry out a basic assessment to understand if the loan is right for you.

Stage 2 - Registration and assessment

We will send you a registration pack they you will need to compete and return. You will also need to send evidence to show that you meet certain criteria to access the loan.

Once we have receive all the information we need, we will assess your application.

We will also carry out our own valuation of the property.

Stage 3 - Loan decision

When we are satisfied that the application meets the criteria of the loan, a decision will be made if the application is to be granted.

If granted, you will be notified by letter and receive a loan certificate.

At this stage you will need to let us know the details of your solicitors. 

Stage 4 - Conveyance

Your application will be referred to our solicitors, who will process the loan and coordinate with your solicitor.

Before you exchange, you will need to have arranged buildings insurance for the property from the date of exchange. You will also need to provide us with a copy of this. 

Stage 5 - Completion

Once all the checks are complete, exchange and completion dates will be confirmed.

The exchange of funds will be agreed and following completion, the keys will be available for you. 

Stage 6 - Post completion

You will receive an annual statement of the loan account. This will show you what equity you have repaid within the property.

Every year, you will also need to send proof that you live at the property and a copy of your certificate of buildings insurance.

 

Is there a cost to access the scheme?

Yes, there is a product fee of £500 that is payable to access the Homebuy Pembrokeshire loan.

This is paid at stage 3 of the process, once we have completed all of our checks and are ready to approve the loan application.

This product fee is non refundable, however, should a property fail to complete, you may not need to pay this fee again if you present a new property within an agreed timeframe.

You will also be responsible for any costs that relate to the purchase of the property and any ongoing costs for the property. 

 

Repair and maintenance

It will be your responsibility for all repairs and maintenance to the property, including any costs incurred.

If you plan to carry out significant alterations to the property (e.g build an extension), you will need to seek permission from Pembrokeshire County Council, as this will have an impact on the value of the property. 

 

Financial advice

We are unable to offer any financial or other advice relating to property conveyancing. You are recommended to speak to an independent financial or mortgage adviser to understand the options available to you.

 

Get in touch

To apply for Homebuy Pembrokeshire, or to see if you are eligible for this loan, please contact our Affordable Housing Team.

 

Email - affordablehousing@pembrokeshire.gov.uk

Telephone - 01437 764551

Post - Affordable Housing Team, 2B, County Hall, Freemans Way, Haverfordwest, SA61 1TP

 

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