3  Property Eligibility

3.1 General

3.1.1 A number of conditions apply to properties which are eligible for purchase under OMHB.  These are set out in this section.

3.2 Eligible Properties

3.2.1  The home selected for purchase must be in England and meet the following criteria:

• the size of the home must be suitable for the applicant’s current housing needs as determined by the Equity Loan Provider. For guidance on “suitability” see New Build HomeBuy 1.4.3.
• the home selected has a wholly residential use. A home where the planning use is part commercial is not eligible.  For examples follow the asterisk;  

 

• the home selected must be bought with vacant possession and be
• immediately habitable OR a new home under construction, provided
  the purchase price is fixed AND exchange of contracts can be achieved within 6 months of the applicant being invited to select a home AND
  the property is available freehold or have a lease length of at least 99 years as well as meet the Lender's requirements; the property does not benefit from any other form of public subisdy

 

• the home is acceptable to the Equity Loan Provider and for mortgage loan purposes, and is in a reasonable state of repair as evidenced by a Homebuyer’s Survey and Valuation (HSV) or equivalent.  A Building Survey is not required by the Equity Loan Provider . A HSV is required for all properties other than new properties that have not been previously occupied, subject to the lenders terms and conditions. The applicant is responsible for the cost of the survey.;
• a new property must have a National House Building Council (NHBC) guarantee or a similar warranty by a reputable insurance company as agreed by the Equity Loan Provider
• Second hand open market leasehold property must provide the Equity Loan Provider with adequate security for its loan i.e. a leasehold interest of more than 55 years as well as meet the conventional mortgage Lender’s requirements;
• the applicant's conventional mortgage lender places no retention, or a retention of only up to £5,000 on the mortgage offer.

3.2.2 The following types of property can be purchased, subject to the ADDITIONAL conditions outlined below (paragraphs 3.2.4, 3.2.5 and 3.2.6)

• a home the applicant is currently renting from a private landlord provided it is self-contained AND the landlord is not resident. Follow asterisk for a comment;  

 

• a property owned or part-owned by a family member (excluding spouse/partner) or business associate, provided that an independent valuation is obtained from a RICS surveyor appointed by the Equity Loan Provider;

 

• an estranged spouse or partner’s share in a formerly shared home can be bought out following a relationship breakdown where the disposal is required/supported by:
• a court order;
• a legal settlement after a court order;
• an order sanctioned by a court (e.g. a consent order); or
• a formal written ‘separation agreement’ signed by both parties, such an agreement can be legally enforced or varied by reference to a court.
• a ‘second’ property can be purchased even though the applicant has an on-going interest in a ‘marital home’ but only in circumstances where the property cannot be sold because the estranged spouse/partner is allowed by the court to remain there whilst bringing  up dependent children;

3.2.3 In order to minimise any opportunities for collusion or fraud the purchase of the properties above will be subject to an independent valuation for mortgage or survey purpose; and/or proof of a court decision. All properties must have an independent valuation undertaken by a RICS or lender approved surveyor.

3.2.4 Where the applicant intends buying an estranged partner’s or spouse’s share of the formerly shared home the valuation will be based at Market Value with vacant possession.

3.2.5 The Equity Loan Provider may reject a home it considers is in poor condition, based on the information provided in the survey.  Where the vendor has agreed to carry out works before completion, the Equity Loan Provider may approve the home on condition that the applicant provides evidence that the works have been completed to a satisfactory standard, and are acceptable to the applicant’s conventional mortgage lender.  3.2.6

3.2.6 Excluded Properties

The following type of property cannot be purchased:

• a commercial property;
• a home on sale at auction;
• a mobile home (including fixed homes covered by the Mobile Homes Act 1983) a caravan and a houseboat;
• a home offered at a discount or on shared ownership terms by an RSL or Local Authority or other public body;
• a plot of land on which to build;
• a home which is to be built by the applicant or a Self Build group;
• a property occupied by sitting tenants.
  

3.2.7 Like-for-like purchases for Key Workers only

Where a Key Worker is looking to exercise an opportunity via OMHB  to purchase an alternative property to the one they currently own on a like-for-like basis (whether or not it was purchased with government assistance), the Equity Loan Provider may approve such a request in the following circumstances:

• Disability of any of the household (mental or physical);
• Poor quality of current home (e.g. no central heating);
• Single parent needing to live closer to family for support;
• Move to be closer to a dependent relative;
• They will be closer to work;
• Their travelling costs will be significantly reduced;
• They will be closer to child care/child's school;
• They are suffering from neighbour problems or harassment;
• Separation (the purchaser must not have a current interest in the previous home unless it is still held subject to a court order)
• Domestic violence;
• Moving from a flat to a house (where there has been a relevant change of circumstances or where there are children in the household).

Key workers wishing to purchase on a like-for-like basis should be advised to speak to their current mortgage lender to establish the cost implications of such a move.