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Homestep Retained Equity Scheme

For the past 3 years award-winning Welsh housebuilder, Llanmoor Homes, has been providing first-time buyers in the Rhondda Cynon Taf region the opportunity to buy brand new homes at an affordable price through Rhondda Cynon Taf Council’s ‘Homestep initiative’.

The scheme allows for Llanmoor’s selected two bedroom properties at their Padfield Court, Bryn Meurig and St Ilids Meadow developments to be sold at either 70% or 75% of the open market value to those who are unable to afford a new-build home at the full market price. The remaining 30% or 25%, which is held by the Council, is interest free and there is no deadline for homeowners to pay the percentage back. 

To find out more please contact the relevant sales centre or join the Homestep Contact List at www.homefinderrct.org.uk/content/Homestep (if viewing on a mobile, click ‘view full site’ and find Homestep under ‘Housing Options’).  


 

What are Homestep?

These are new build houses where the Council has worked with a developer (in this case Llanmoor Homes) on a new development to make them more affordable to buy.


70%-30% Eligibility - Padfield Court & Bryn Meurig

You buy the house at 70% of its full market value. The Council retains the remaining 30% share of the freehold value of the house via a second charge on the deeds of the property. This means that you only need a deposit and mortgage for 70% of the value of the property. You do not pay any rent on the 30% charge retained by the Council, however, if you sell the property in the future, you would pay the Council 30% of the price (market value) at the time of sale.

Alternatively, you could purchase the Council’s 30% charge (after a minimum period – usually this is 12 months) for 30% of the open market value at that time. 

For example, if the open market value of a property made available through the scheme is £120,000 you would pay 70% of this, i.e. £84,000. If you resold the property in the future and the property was valued at £150,000 you would only receive £105,000 from the sale and would have to pay the Council £45,000.

 

75%-25% Eligibility - St Ilids Meadow

You buy the house at 75% of its full market value. The Council retains the remaining 25% share of the freehold value of the house via a second charge on the deeds of the property. This means that you only need a deposit and mortgage for 75% of the value of the property. You do not pay any rent on the 25% charge retained by the Council, however, if you sell the property in the future, you would pay the Council 25% of the price (market value) at the time of sale. 

Alternatively, you could purchase the Council’s 25% charge (after a minimum period – usually this is 12 months) for 25% of the open market value at that time.

For example, if the open market value of a property made available through the scheme is £120,000 you would pay 75% of this, i.e. £90,000. If you resold the property in the future and the property was valued at £150,000 you would only receive £112,500 from the sale and would have to pay the Council £37,500.

 

Are there any restrictions?

This product is only available on some new build developments. 

You must check carefully that you can afford to buy a home through this method and you should receive independent financial advice regarding your borrowing requirements. The Council will check your financial circumstances before offering you a home to ensure that you can raise a mortgage and that you will be able to afford the monthly running costs of the property. As a homeowner you will be responsible for all general repairs to the property. 

Depending on the new build development you may be required to pay a deposit to the developer in order to reserve a home. You will also need to have enough savings to cover mortgage arrangement fees, valuation fee, stamp duty and solicitors costs.

 

What should I do now?

If you think that this method of affordable homeownership is right for you please complete the on-line Homestep application form. We will let you know within 2 weeks if you are eligible to join the list.  If you are approved to join the register you will be automatically notified of properties available to purchase on new build developments.

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