End of term - key worker living scheme

wenzani

Reaching the end of the mortgage term of a 2004 key worker living scheme with 40% help to buy. Trying to find out if I clear the mortgage do I own the property outright or do tower homes and the local authority still hold a charge on the property and where to find details of my options. 

la531983

If you clear the mortgage you own 40% of the house, surely?

If you want more, ask the housing association of whoever owns the 60% to staircase.

Presumably you are still paying rent on the 60% bit? There isn't enough detail in your post. But if you staircase to 100% you own the home and nobody else. 

wenzani

This is was not a rent to buy type of scheme, in 2004 the local authority contributed 40%

la531983

Right so your share was 60%, you didnt make that clear.

The internet suggests its an equity loan you need to pay back to the LA, but someone who knows more may be along shortly.

Ramouth

My sister and I bought a house using a key worker scheme in 2004 and the arrangement was that they got their percentage back when we sold.  So if you are on the same scheme I should think yhat while you can continue living there without paying rent on their 40%, you will still need to pay it back if you sell.  One thing to note is that with the scheme we were on, if you improve the property (we dealt with the damp, put heating in, rewired and repaired the roof) you can deduct these costs from the amount you pay back.

theartfullodger

What does all the paperwork you were given when you started this process say about your question, please?

Apologies, can't read it from here.

sheramber

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim21736

Under KWL a loan up to a limit of £50,000 (some London teachers may be eligible for loans up to £100,000) may be made as an equity loan. On this type of loan no repayments are due until the property secured on the loan is sold or the key worker stops being a key worker. At that time the key worker must repay a percentage of the property’s value equivalent to the percentage of the purchase price covered by the equity loan.

For example, if a key worker purchased a home for £160,000 with the assistance of a £40,000 equity loan under KWL, the loan represented 25% of the purchase price. When the property is sold, the key worker must repay 25% of the sale proceeds to KWL.