Common Affordable Scheme Questions

We understand that purchasing a property through an affordable scheme can be confusing and you may be unsure which scheme suits your needs.

Below is a scheme comparison table for you to see at a glance what each scheme has to offer and answers to common questions you may have:

Scheme comparison table

Frequently asked questions
 Equity LoanShared OwnershipRent to buy
Do I need to be a First-time buyer? No No Yes
Does this need to be my sole residence? Yes Yes Yes
Can I own 100% of the property? Yes Yes Yes
Can I sell my property in the future? Yes Yes Yes
Can I decorate the property? Yes Yes No
Can I make major home improvements? Yes Yes* No**
If the property value decreases, will I have to pay back the same amount? No N/A N/A

*With permission from landlord

**While still renting

Equity Loan

Is the equity loan scheme only for first time buyers?

  • No - You don’t have to be a first-time buyer to access our equity loan scheme. This scheme is open to first time buyers as well as those already on the property market, however this home must be your only residence. Further details on the criteria you must follow in order to qualify this scheme can be viewed on our dedicated webpage.

Will I be able to own 100% of my home?

  • Yes - under the equity loan scheme, you will be the owner or joint owners of the property and will have full title. Wigan Council’s interest is secured by the equity loan charge, which is similar to the interest that your mortgage lender has. You can also voluntarily repay the equity loan at any point before the 25-year contract ends, this is commonly called staircasing. If you would like to repay all or part of the equity loan, you must write to Wigan Council stating the amount you wish to repay, this must be a minimum of 10% of the property value. At this point you will be responsible for paying the costs of an independent valuation to take place to ensure the right amount is paid dependant on the current market value of your property.

Will the interest will be high?

  • No - The Wigan council’s Equity loan scheme does not have an associated interest rate unlike the help to buy government equity loan scheme. The amount you will pay back will be dependent upon the value of your home at the time you repay the equity loan with no interest applied.

If I purchase a home using the Equity loan scheme, will it be harder to sell in the future?

  • No - The equity loan is in place to make your life easier. The process of selling the property works in the same way as applying to repay your loan at any point. You will need to notify Wigan Council in writing that you wish to sell the property in advance. We will require an independent valuation of the market value of the property by a qualified surveyor. Based on the valuation, we will then confirm the sum that is to be repaid upon completion of sale. Once a sale is agreed, you must supply us with the details of the solicitors acting on your behalf. Upon sale of the property your solicitor will distribute the sale proceeds accordingly between the mortgage lender, the Council and yourself

Will I have to repay the same amount even if the property is worth less than when I bought it?

  • No - If, when you sell or repay the equity loan, the property is valued below the value when you bought it. You will pay back less than the original loan value. Provided that the sales value is at the market rate and you have complied with the terms of the equity loan, you will not be required to make up any shortfall.

Shared Ownership

Is the Shared ownership scheme only for first time buyers?

  • No - You don’t have to be a first-time buyer to apply for a share ownership property. This scheme is open to first time buyers as well as those already on the property market however this home must be your only residence. Please see above further details on the criteria you must follow in order to qualify this scheme.

If I purchase a home using the Shared ownership scheme, can I sell it in the future?

  • Yes - You can sell your Shared Ownership home at any point. Before you sell your home, you must notify your landlord. The landlord then has a ‘nomination period’ meaning they have a short period of time (usually in the region of 4-12 weeks) to find a buyer or purchase back your share. If the landlord does not find a buyer within this period, you are then entitled to sell your share yourself on the open market.

Does it cost more to pay for both Mortgage and rent each month?

  • No - it often works out cheaper than renting privately and your monthly payment contributes to paying off your mortgage.

Will I be able to own 100% of my Shared ownership home?

  • Yes - you can voluntarily buy more shares in your home after you become the owner, this is commonly called staircasing. As you buy more shares your rent will decrease. On most Shared Ownership homes, you can buy shares of 10% or more at any time, with some newer schemes allowing you to purchase 5% or more. It is important to note an independent valuation will be required when purchasing any additional shares. Any shares you wish to purchase will need to be bought within 3 months of the valuation date.

If I buy a home using the Shared ownership scheme, will I be able to make alterations or home improvements?

  • Yes - you are entitled to paint and decorate your shared ownership home without consulting your landlord. You might need written approval from your landlord on any structural changes or improvements. It is important to check your agreement before starting any adaptation which could effect the fabric of the building.

Rent to Buy

Is this the same as affordable rent properties?

  • No - affordable rented properties are properties intended for continued rental use. Although both schemes offer subsidised rent set a minimum of 80% of the market rent value, rent to buy homes are for those with the intention to purchase the property in the future when this is financially possible and the subsided rent is used to aid in the saving of a deposit for the property. Rent to buy homes help you to settle into your surrounding knowing you will have the option to buy your rent home.  

Will I have to wait until my tenancy ends before I can buy the property?

  • No - depending on the provider you may be entitled to apply to buy your home at any point as long as your landlord agrees, and you are able to get a mortgage for the share you wish to purchase. Some providers allow you to purchase your home from them on a shared ownership basis after year 1, with the possibility to buy outright after 5 years. If your landlord decides to sell the property during your tenancy, they must give you the option of buying the property in the first instance. It is important to note the property price will be dependent on its market value and therefore may change during your tenancy.

Would I have to buy the property in full?

  • No - Although it is the expectation that the period of subsidised rent will give the tenant the opportunity to save for a cash deposit to apply to buy their home there is no obligation and therefore if you are unable to afford the purchase of the home you will not be expected to do so. Some providers may give you the option to enter a part rent part buy scheme known as Shared Ownership where a share of either a 35%, 50% or 75% can be purchased initially with a rental amount due on the remaining share.

Are all Households are eligible for this scheme?

  • No - this scheme is tailored to First time buyers as it looks to ease the transition into buying a home by allowing the chance to save for a cash deposit. Please see above further details on the criteria you must follow in order to qualify this scheme.

© Wigan Council