Buying a Home with OMHB Makes Sense for Benjamin
He would have bought the home he was recently renting in Brixton, south London, but it was way out of his price range.
“Living in Brixton wasn’t bad,” says Benjamin. “But I was paying a substantial amount of rent and I think it makes more sense to be paying towards a mortgage, even if it means paying a little bit more each month. I was happy enough where I was. I would even have bought the place if I could, but it would have been far too expensive.”
Benjamin had heard about government-backed schemes to help key workers onto the property ladder when he was training to be a teacher at university five years ago. Even then, he knew it would be difficult to buy a property in London.
“I knew there was help for people in my position and with the Open Market HomeBuy scheme it makes more sense to buy a place,” he says. The scheme gives people who can’t afford to buy a home on the open market the opportunity to choose where they want to live and helps them to pay for it by offering an interest free loan up to 32.5% of the value of their new home.
Benjamin was spurred into action by his cousin – who had bought a property through a key worker scheme in east London. When he lived in Brixton, Benjamin was working in south London, but he decided to move further north when he started his current job teaching design and technology in north London.
“It made sense to move further north and I thought this was a good time to buy,” he says. “I contacted MHO, which sent me detailed information about the scheme. I attended an interview, where the team were very helpful and talked me through the scheme.”
Benjamin’s property was valued at £158,000. He had to raise 75% of the purchase price by choosing a mortgage from one of the four mortgage lenders participating in the scheme.
He took advantage of the Open Market HomeBuy scheme to borrow the other 25%, totalling £39,500. Half the amount, which remains interest-free for five years, came from Yorkshire Building Society and the other half – which came from MHO and remains totally interest free – only has to be returned if Benjamin leaves his teaching career.
Benjamin says his second meeting with a financial advisor through MHO “really helped to sort out an agreement in principle for my mortgage. Then I went and looked for a property.”
Benjamin has a daughter who visits him once every fortnight, so he wanted a two-bedroom home in Luton, which would also be convenient for his work.
“I found a three-bedroom semi-detached house with a garden,” he says. “It’s a good property, and it was in a good state of repair, so I didn’t have to do much work on it. I moved in at the end of May 2007, only a few months after my interview with MHO.”
“Owning your own property is a long-term prospect,” he says. “I can decorate it the way I want to and I hope the investment will grow. It’s nice having a garden, and knowing the whole place is mine. It would have been so much harder for me to buy a home without the help of the HomeBuy scheme.”
Benjamin’s move also had a positive social effect. In Brixton, he was a public sector tenant. By getting on the property ladder elsewhere he released his L&Q tenancy, which meant someone else with more urgent housing needs could be housed.