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Finding discount mortgages for people across the UK
Discount Market Sale Scheme
Are you dreaming of owning a home in the UK, but finding it challenging due to rising property prices?
Part of the Government’s commitment to providing affordable housing has seen the introduction of discount market sale schemes operated by new build developers. Often known as “discount off market value” or DOMV housing for first time buyers.
They offer new homes for key workers, with a reduction in the market value, to help those buyers that can afford the mortgage repayments but are struggling to save a big enough deposit due to the value of the property. At Key Solutions, we specialise in guiding you through the intricacies of DOMV mortgages, ensuring you secure your dream home without breaking the bank.
How discount market sale works
DMV, also referred to as Council Shared Equity or reduced market value scheme, offers a unique opportunity to purchase a new build or existing property at a substantially reduced price. Planning policy changes made by the government allow property development companies under the scheme to build new homes without paying some local authority fees, saving them money on the cost of development which they then, in turn, pass on to potential homeowners.
This enables them to offer a discount on the market value between 20% and 50%. This discount serves as a stepping stone for individuals who live or work within the borough of the development.
The properties are exactly the same as the rest of the new build properties on the development, with no compromise on quality or energy efficiency. Applicants apply through their housing providers and are assessed individually on their suitability to qualify for the discount.
The Key Solutions Advantage
Check your eligibility
There are no set requirements to be able to secure a property under these schemes and every application is assessed on its own merits, however as a general rule priority is given to those who are:
- Residency or Employment: You must live or work within the specific borough council or local authority operating the DMV scheme. Some regions may require a minimum duration of residency or employment.
- Income Threshold: Your gross annual household income at the time of application must not exceed 45% of the DMV price of the property.
- Ownership: You must not currently own another property.
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Things to consider
There are a couple of important things to be aware of when considering purchasing a property under one of these schemes:
- You cannot profit from the original discount upon the sale of your property – when selling, you must do so at the same level of discount you purchased the property at
- There are only a limited number of properties available, you may therefore have to wait if others are deemed to be more eligible than you.
- You may be required to purchase the whole property if the individual local authority doesn’t allowing ‘staircasing’ (buying the discounted portion of the property)
Making it easier to buy your home
If you are struggling to raise the funds you need to buy your own home and work in a key sector then purchasing a new build property under this scheme may be an option. To find out more get in touch with our friendly team of independent mortgage and protection advisers on 0800 138 5856 or get in touch below.
Look no further than Discount Market Value Mortgages (DMV), a remarkable solution designed to make homeownership more attainable for individuals and first-time buyers
FAQs About Discount Off Market Value
A Discounted Market Scheme, also known as Discount Market Sale (DMS), is a homeownership program aimed at helping low and middle-income individuals purchase new builds or existing properties at a reduced price. This discounted rate is typically around 20%, making it more affordable for eligible buyers to step onto the property ladder.
To qualify for the Discounted Market Scheme, you generally need to meet these criteria:
- Reside or work within the specific borough or local authority of the development.
- Have a household income that doesn’t exceed a certain percentage (usually around 45%) of the discounted property price.
- Not currently own another property.
A “Discount to Market Home” refers to a property that is offered at a price lower than its market value. This reduction in price is intended to make homeownership more accessible for individuals who might otherwise struggle to afford a home at full market value.
The government’s Help to Buy scheme (which is no longer available to apply for as of 31 October 2022) involves offering eligible first-time buyers a loan of up to 20% (or 40% in London) of the property’s value, provided they can contribute a 5% deposit. This enables buyers to access more favourable mortgage rates on the remaining portion of the property’s value.
One downside of the Help to Buy scheme (which is no longer available to apply for as of 31 October 2022) is that the government takes an equity stake in your property, which means they will benefit from any increase in its value when you sell. Additionally, after the initial interest-free period on the government loan ends, you’ll start paying interest on that portion.
Whether the Help to Buy scheme (which is no longer available to apply for as of 31 October 2022) is worth it depends on your individual circumstances. It can help you enter the property market with a lower deposit and potentially access better mortgage rates. However, consider the long-term financial implications, such as paying back the government loan and the impact of property value changes.
The government’s Help to Buy scheme (which is no longer available to apply for as of 31 October 2022) is set to be replaced by a new scheme called the First Homes scheme. First Homes will offer a discount of at least 30% on market prices for local first-time buyers, key workers, and veterans. It aims to prioritise affordable homeownership for those who need it the most, and works in a very similar way to the original Help to Buy Scheme.