Metropolitan Home Ownership chosen to deliver MyChoiceHomeBuy in London

April 08

Metropolitan Home Ownership (MHO) has won a competition run by the Housing Corporation to help people on low and moderate incomes get on to the property ladder.

The new product – MyChoiceHomeBuy – will replace the existing Open Market
HomeBuy products, which are due to be withdrawn after the end of March. MHO will be
offering MyChoiceHomeBuy to home buyers in East, North and West London.

First-time buyers searching for a home on the open market will take out a regular
mortgage from any participating bank or building society to buy a percentage of the
purchase price. Eligible home buyers will then receive an equity share from
MyChoiceHomeBuy to cover the remainder of the purchase price. This can be as
much as 50 per cent of the total property value, or as little as 15 per cent.

MyChoiceHomeBuy has been designed to offer a flexible and simple path for
potential home buyers in London with a household income ranging from £17,600 to
£58,600 to buy their own home. A small fee of 1.75 per cent is payable on the equity
bought with MyChoiceHomeBuy for the first year. Annual increases on this fee are
capped at RPI plus one percent to ensure that the monthly costs of owning a home
bought with MyChoiceHomebuy are predictable and affordable.

Graeme Moran, Managing Director at MHO, said: “MyChoiceHomeBuy is a great
new product, offering excellent affordability to low to middle income earners who
might otherwise find themselves priced out the property market. It is a highly
sustainable product for the customer, with a low fee and no hidden charges or nasty
surprises for the customer.

“It gives customers more choice, offering a solution for affordable living to the
thousands of Londoner’s trapped in private rented or over-crowded family
accomodation.”

After the first year, home buyers can choose to buy part or all the remaining equity
on their property, as soon it is financially viable for them to do so. By paying back the
equity at a price based on the valuation at that time, the monthly charge or fee that
needs to be paid will be reduced proportionately.

MHO are investing their own finance into the product. MyChoiceHomeBuy will be
shared on a 50/50 basis between MHO and the Housing Corporation, a key
partnership in delivering the product.

On the development of the new product, Graeme Moran, said: “We have tried and
tested many products over the years, therefore MyChoiceHomeBuy has evolved out
of years of experience. We are extremely excited to bring the product to the market,
to enable first-time buyers to secure the home of their choice, at an affordable price,
in a location suitable for them.”

The government has prioritised the following groups for assistance under My Choice
HomeBuy:

• Social rented tenants and housing association tenants
• Local residents prioritised on local authority housing waiting lists
• Public sector key workers
• Other priority first-time buyers recommended by the regional housing boards

The Shared Equity Finance Competition was launched by the Housing Corporation in
early 2007, with the aim of providing a wider choice of shared equity products for
home buyers. Home buyers can apply for MyChoiceHomeBuy from the 1st of April
2008 by applying to Housing Options – www.housingoptions.co.uk. The product will
be offered for the three year period 2008-11, which is covered by the Government’s
Comprehensive Spending Review subject to available funds.
For further information visit: www.housingoptions.co.uk or call 0845 230 8099.