Homestep is a way of making home ownership more affordable. It is operated by Rhondda Cynon Taf County Borough Council and delivered in partnership with private house builders.
These are new build houses where the Council has worked with a developer on a new development to make them more affordable to buy. You buy the house at a percentage of its full market value (usually 70%). The Council retains the remaining share of the freehold value of the house (i.e. 30%) via a second charge with the Land Registry. This means that you only need a deposit and mortgage for a percentage of the property value.
You do not pay any rent or interest on the charge held by the Council and there is no deadline for you to pay the percentage back. However, if you dispose of the property in the future, you would pay the Council the percentage of the market value held at the time of sale. Alternatively, you can purchase the Council’s charge after a minimum period of 12 months for the percentage of the open market value at the time.
For example, if the open market value of a property made available through the scheme is £120,000, you would pay 70% of this, i.e. £84,000. If you resold the property in the future and the property was valued at £150,000 you would only receive £105,000 from the sale and would have to pay the Council £45,000.
To be able to apply for Homestep you must:
•Be a first time buyer (although the Council will also accept previous home owners who have gone through a relationship breakdown)
•Be over 18 years of age
•Be a UK passport holder or have Indefinite Leave to Remain in the UK
•Be unable to afford to purchase the property at full market value
•Be able to raise a mortgage with a suitable mortgage lender (usually with a deposit)
•Have access to enough savings to cover the costs of buying a home at 70% of market value, such as solicitors, mortgage and survey fees
You just need to wait until a new build development becomes available and then let us know you are interested in buying a property on that site! The easiest way of keeping up to date is to join our contact list. You will then receive emails each time a new property is available through Homestep (unless you indicate you would prefer to be contacted by post). Properties are also advertised on the Homestep Website, via house builders and in local communities.
Properties are usually advertised at least 3 months in advance of when the homes will be due for completion. All new build homes are usually sold “off plan”, which means you will be expected to choose a property from detailed floor plans and site layouts. You should be able to view the property before you complete your purchase or view a similar type property at the development.
The Council just needs to check your financial circumstances before offering you a home. This is called an ‘Affordability Interview’ can be done over the telephone or in person at the Council’s offices in Ty Elai, Dinas Isaf East, Williamstown, Tonypandy. CF40 1NY.
This is nothing to worry about – we will just check to make sure you are not borrowing beyond your financial means, or if we feel you can afford a similar property at full market price. As a general guide, we recommend that you shouldn’t spend more than 35% of your net monthly income (after tax and deductions) on your mortgage repayments.
You will be able to pick your preferred plot and will then be provided with a nomination letter from the Council. You should then take a copy of this letter to the development site and pay a reservation fee to the developer to reserve your new home. Reservation fees are normally £500 although this will be confirmed beforehand. Please note this fee is non-refundable.
You then need to go back to your mortgage provider or Independent Financial Advisor to finalise your mortgage offer and also instruct a solicitor to act on your behalf during the purchase.
We recommend you join our contact list so we can keep you up to date, alternatively, give us a call on 01443 281136 or contact the Housing Strategy Team as follows:
Housing Strategy Team,
Rhondda Cynon Taf County Borough Council,
This quick and easy guide shows the difference between Homestep and Help to Buy
If you are unsure about any aspect of the scheme, please contact us and we will be happy to discuss any concerns you may have:
Telephone us on: 01443 281136
Email us at: firstname.lastname@example.org