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Wednesday, 4 April 2012

Buying a home - making it more affordable

Buying with other people or buying a newly-built or park home are some of the ways you can make owning a home more affordable. You may also qualify for help from a home ownership scheme. Find out what you need to consider and where to get more information.

Help from home ownership schemes

A number of government schemes offer people on lower incomes and first-time buyers financial help. For information on these schemes, see the link 'Affordable home ownership schemes - a guide'.

A ‘first-time buyer’ is defined differently by different schemes. HM Revenue & Customs defines you as a first-time buyer if you haven’t bought, alone or with others:

  • an interest in residential property in the UK (except property with less than 21 years left on the lease) 
  • an equivalent interest anywhere in the world

Some home ownership schemes let council or housing association tenants buy their homes at a discount, if they qualify. ‘Affordable home ownership schemes - a guide’ explains the available schemes.

Buying a home with other people

Buying a home with family members, friends or a partner can help make home ownership a reality. You’ll be able to share the costs of the deposit and the expenses of running a home.

Before you buy, decide how ownership and use of the home will be arranged between everyone who is buying. Think carefully about what will happen if circumstances change – this can help avoid disagreements in the future.

You should get legal advice and draw up an agreement as to how property will be divided in case of:

  • one of you deciding to give up their share in the property
  • one of you dying

Arranging legal ownership of the property

Legal ownership of a home can be arranged between two or more people, as ‘joint tenants’ or ‘tenants in common’. The maximum number of legal owners is four.

There are legal and financial rules depending on the form of ownership you choose. For example, if you buy as ‘joint tenants’, you can’t pass on your share of the property in your will. Instead, it will automatically go to the other joint owners.

Get legal advice from your solicitor or licensed conveyancer before you make a decision. 

Buying a newly built home

Buying a newly built home can sometimes be more affordable than buying an older home because:

  • some developers offer special deals, like offering to pay Stamp Duty Land Tax or some of the deposit 
  • you’re less likely to have to spend money on repairs and decorating in the first few years
  • you can often choose the fixtures and fittings, like carpets and kitchen units

Buying a boat

Buying a boat may be a more affordable way to own a home. Before you decide to live on a boat, see ‘Boat moorings’ to find out:

  • the practical issues you need to think about
  • what costs are involved 
  • how to go about buying the right boat

Buying a park home

Park homes (also known as static caravans or mobile homes) can cost less than traditional houses.

Some of the advantages of buying a park home are:

  • Council Tax for this type of property is usually in the lowest band
  • you won’t need to pay Stamp Duty Land Tax
  • park homes are often cheaper than brick-built homes

There are major differences to buying a brick-built property. If you don’t own the land your park home sits on:

  • you’ll have to pay rent and other maintenance charges, as well as your mortgage
  • when you sell your home, you’ll have to pay a ten per cent commission to the person who owns the site
  • there are strict rules about who you can give or sell the home to

For more about park homes, see the section ‘Mobile and park homes and houseboats’.

Legal help and mortgage lenders for a park home

You’ll need to find a solicitor or licensed conveyancer who has experience in dealing with park homes. This is because the legal rules are different than for brick-built homes.

You’ll also need a specialist lender because most high street lenders don’t give mortgages for park homes.

You can find details of solicitors and mortgage lenders that have experience in this area on the internet and in park home magazines. For more advice, see ‘Buying a park home’.

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