Homestake
Homestake is a shared equity scheme aimed at helping people on modest incomes who wish to be homeowners but whose incomes mean that it is difficult to find a suitable property because of local housing market properties.
A Homestake grant is provided by Communities Scotland to help Housing Associations develop or purchase properties for shared equity purchasers who cannot afford to pay the full price of a property.
Homestake purchasers will typically purchase between 60% & 80% of the property by paying this percentage of the market value. The Housing Association retains ownership of the remaining percentage of the property. The Homestake purchaser however, does not have to pay a proportional rent to the Housing Association as is the case with Shared Ownership.
Example
Property value = £100,000
Homestake purchaser buys equity stake of 60% = £60,000
Housing Association retains equity stake of 40% = £40,000
After 10 years, the Homestake purchaser wishes to sell their stake.
The market value of the property is now £150,000 (example only)
Homestake purchaser's equity stake is now 60% of £150,000 = £90,000
The example above shows that in a housing market where there is high house price inflation, a Homestake purchaser can accrue equity which they may wish to re-invest in another property. This effectively helps people on modest incomes to access owner-occupation.
It may also be possible for a Homestake purchaser to increase their equity stake until they own the property outright. This will not always be the case however as in pressured housing markets, the Housing Association may hold a 'Golden Share' which is a mechanism to ensure that the property remains affordable for future purchasers.
If you are interested in hearing about Homestake opportunities in this area,
submit your details here, and we will add you to our 'low-cost home ownership' database.
