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Key Worker Living Scheme

What Is It?

This scheme was launched in 2004 to help certain public sector employees to buy a home, upgrade to a family home or rent a home at an affordable price. By helping key workers to buy or rent a home the Government hopes to keep them in the jobs they have training for, retaining the essential skills needed in our public services. The scheme is targeted at key worker groups in London, the South East and East of England where there are problems with recruitment and retention.

KWL status was expanded on 20 Sep 06 to include Armed Forces personnel (including MPGS) and MOD civilians employed in key worker categories such as MOD Police, Defence Fire Service and clinical staff in MOD medical establishments of all personal status categories.

On 28 Dec 07 the scheme was expanded to cover all English Regions and to give MoD personnel access to all of the schemes available under the Key Worker Scheme. MOD personnel now have access to the following products under the KWL scheme:

Open Market Homebuy

This scheme enables key workers and other priority first time buyers to buy a property on the open market with the help of an equity loan. There are 3 different Open Market Homebuy products:

i. Product in partnership with a lender. Under this scheme purchasers are required to raise 75% of the purchase of a home on the Open Market. One of the participating lenders will provide a regular mortgage combined with an equity loan of 12.5% of the property’s value alongside a Government equity loan of 12.5% of the property’s value, provided through a Homebuy agent. No charge is levied on either of the equity loans for the first 5 years. After 5 years the purchaser can be charged a maximum of 3% interest on the lender’s equity loan, rising up to but not exceeding the lender’s standard variable rate after 10 years. The purchaser will never be charged for the Government provided equity loan. The lenders equity loan is required to be repaid upon payment of the final instalment of the mortgage and both equity loans are required to be repaid upon the sale of the property. When purchasers repay the equity loans they will have to share any increase in the property’s value with the lender and the Homebuy agent.

ii. Government only product. The purchaser will be offered an average of a 17.5% Government equity loan through a Homebuy agent, dependant upon individual circumstances. This product can be used in conjunction with any deposit the purchaser might have and with a conventional mortgage from any qualified lender regulated by the FSA. There is no ongoing charge or interest on the government loan and it can be repaid when the purchaser can afford to do so but must be repaid when the property is sold. The amount that is repaid is calculated as 17.5% of the property’s market value at the time of repayment. The maximum loan that can be given is usually £50k, although this cap can be exceeded in exceptional circumstances.

iii. Product in partnership with Yorkshire Building Society. Yorkshire BS are offering a 15% equity loan alongside the government loan of 17.5%, providing the purchaser with a loan of up to 32.5% of the purchase price with remaining value of the property covered by a conventional mortgage from Yorkshire BS. Both equity loans are free from charges for the first 5 years, after which a charge of 3% is applied to the Yorkshire BS equity loan for the remaining term of the loan. If the purchaser has a deposit, this will be used to reduce the Government equity loan. Purchasers are required to repay the Yorkshire BS equity loan no later than upon payment of the final instalment of their mortgage and will have to repay both the Yorkshire BS and the Government equity loans upon sale of the property. When the loans are repaid, purchasers will also repay a share of any increase in the property’s value to both the Yorkshire BS and the Government.

New Build Homebuy

Under this scheme purchasers can buy between 25% and 75% of a new build property (depending on what they can afford) on a leasehold basis. They will pay a mortgage on their percentage of the property and a subsidised rent on the remainder. The rental payments will be calculated as a small percentage (initially less than 3%) of the providers share of the property. The purchaser can, if they wish, increase their share of the property as and when they can afford it, all the way up to 100%, this is known as staircasing. When the purchaser wishes to sell, they can sell their share to another household nominated by their landlord (normally a housing association) or they can staircase to 100% and sell it in the normal fashion. However, the landlord may want to buy the property back to offer to other households who want to enjoy low-cost home ownership. The property is sold at market value and the shared owner will benefit from any equity which has built up on the share they own.

 

Intermediate Rent Scheme

This is where the accommodation is provided by a registered social landlord and the rent for a property is set at a level between that charged by social and private landlords. The tenant is likely to pay between 75% to 80% of the local market rent for the type of property that they live in. They would have an assured shorthold tenancy whilst they remain a key worker. FTRS(FC) personnel are eligible for this scheme only under the KWL programme.

First Time Buyers Initiative (FTBI)

Individuals that are eligible for home ownership options under KWL can also get priority access to a new scheme called the First Time Buyers Initiative (FTBI). FTBI aims to give more people the opportunity to own their own homes by increasing the supply of affordable housing for sale. It is being delivered through English Partnerships, the national regeneration agency and is available to key workers across all English regions. They have a target of providing up to 15,000 homes by 2010 with at least 50% of these being available to those with Key Worker status. It aims to help eligible first time buyers to buy a new home with an affordable mortgage. They must take out a mortgage for at least 50% of the property purchase price, and English Partnerships will provide a contribution up to the full purchase price. After living in the home for three years, buyers will pay a fee to English Partnerships based on a small percentage of its contribution. English Partnerships is starting to make homes available through some early pilot projects and is seeking to develop homes in most regions by 2010. FTBI homes will not immediately be available in all regions but applicants can check on availability through their HomeBuy Agents.
Eligibility.

a. Open Market and New Build Homebuy. Personnel wishing to be considered for Key Worker status under these schemes must fulfil the following eligibility criteria:

i. Must be a member one of the following; Regular Service, MPGS, MOD Clinical Staff (excluding doctors and dentists), MOD Police, Uniformed staff in Defence Fire Service.

ii. Must have completed Phase 1 training.

iii. Must have at least 5 years to serve before discharge/retirement date.

iv. Household income must be below £60k per annum.

v. Applicant’s permanent duty station must be located in England.

vi. The prospective property must be within “reasonable travelling distance” to their permanent place of duty, as a guide this would normally be within 50 miles or 90 minutes travelling time.

vii. Must be a first time buyer or have a requirement to move home to meet their household needs (the existing property would have to be sold).

b. Intermediate Rent Scheme. The above criteria applies with the following variations:

i. In addition to the listed roles Full Time Reserve Service (Full Commitment) also get access to the Intermediate Rent Scheme.

ii. Individuals need not have completed their Phase 1 Training.

iii. There is no requirement to have 5 years Service remaining.

c. First Time Buyers Initiative. Personnel wishing to be considered for Key Worker status under this scheme must fulfil the following eligibility criteria:

i. Must be a member one of the following; Regular Service, MPGS, MOD Clinical Staff (excluding doctors and dentists), MOD Police, Uniformed staff in Defence Fire Service.

ii. Must have completed Phase 1 training.

iii. Must have at least 5 years to serve before discharge/retirement date.

iv. The limit on household income varies from region to region, for precise details contact the local Homebuy Agent.

v. Applicant’s permanent duty station must be located in England.

vi. The prospective property must be within “reasonable travelling distance” to their permanent place of duty, as a guide this would normally be within 50 miles or 90 minutes travelling time.

vii. Must be a first time buyer or have a requirement to move home to meet their household needs (the existing property would have to be sold).

Clawback

This is the term used to describe the requirement to repay any assistance received in the event of the leaseholder losing their KWL status. The leaseholder has a period of 5 years from the loss of KWL status in which to either sell the property and divide the proceeds in accordance with the percentage split, or “staircase” their share of the property up to 100%. If the leaseholder is discharged other than at a natural exit point ie. PVR or notice prior to completing their engagement, clawback is triggered.

Sub-letting

 

Shared ownership leases must prohibit sub-letting by the leaseholder to protect public funds and ensure applicants are not entering shared ownership for commercial gain. However the housing association may consider, on a case-by-case basis, requests to sub-let in certain controlled circumstances. It is the housing association’s decision as to whether they agree to the request and permit sub-letting.

Long Service Advance of Pay (LSAP)

 

LSAP can be used in conjunction with the KWL programme.

Applications. The KWL programme is run on behalf of the Government by “Homebuy Agents”, these are housing associations (otherwise known as Registered Social Landlords or RSLs) who run the KWL programme in their area of the country. “HomeBuy Agents” can register your interest, assess your eligibility and provide details of schemes in your area. Interested personnel should contact the “Homebuy Agent” who covers the location of your permanent duty unit, as shown below:

REGIONAL HOMEBUY AGENTS

London
tel: 08452 308 099
email: via website
web: www.housingoptions.co.uk

Kent, Sussex and Essex
tel: 07002 662 846
email: marketing@moat.co.uk
web: www.homebuy.co.uk

Hampshire
tel: 02380 628 000
email: homesinhants@swayhs.org.uk
web: www.homesinhants.co.uk

Surrey
tel: 0845 600 6699
email: homebuy@tvha.co.uk
web: www.homebuy.co.uk

Berkshire, Buckinghamshire and Oxfordshire
tel: 0845 601 7729
email: homebuy@chg.org.uk
web: www.homebuy.co.uk

Hertfordshire
tel: 01582 869 440
email:leavalleyhomes@aldwyck.co.uk
web: www.leavalleyhomes.co.uk

Bedfordshire and Cambridgeshire
(including Fenland and Peterborough, Forest Heath and St Edmundsbury) tel: 0845 456 6757
email: info@keyhomes-east.org.uk
web: www.keyhomes-east.org.uk

Norfolk and Suffolk
(except Forest Heath and St Edmundsbury) tel: 0845 850 2050
email: ofs@orbit.org.uk
web: www.orbithomebuyagents.co.uk

South West North Zone
(Bath & NE Somerset, Bristol, Cheltenham, Cotswold, Forest of Dean, Gloucester, Kennet, Mendip, North Somerset, South Gloucestershire, Stroud, Swindon, Tewkesbury North Wiltshire and West Wiltshire) tel: 0800 073 1315
email: via website
web: www.homebuy-southwest.co.uk

South West South East Zone
(Bournemouth, Dorset, Salisbury and South Somerset) tel: 0800 707 6 707
email: info@search4myplace.co.uk
web: www.search4myplace.co.uk

South West Peninsula Zone
(Cornwall, Devon, Taunton & Sedgemoor and West Somerset) tel: 01803 217 600
email: info@home2own.org.uk
web: www.home2own.org.uk

Northamptonshire
tel: 0845 456 6757
email: info@keyhomes-east.org.uk
web: www.keyhomes-east.org.uk

Leicestershire, Nottinghamshire and Derbyshire
tel: 0844 892 0112
email: sales&marketing@emha.org
web: www.emhomebuy.org.uk

Lincolnshire
tel: 0845 845 0800
email: homebuy@eshagroup.co.uk
web: www.home2you.co.uk/

Staffordshire, Shropshire, Wolverhampton, Walsall, Dudley, Birmingham, Sandwell, Solihull, Coventry and Warwickshire
tel: 0845 607 6726
email: Iwoodall@mercian.org.uk
web: www.homebuyagents.org.uk

Herefordshire & Worcestershire
tel: 0845 658 5420
email: home2own@wmhousing.co.uk
web: www.home2own.uk.com

Tyne & Wear, Northumberland, Tees Valley and County Durham
tel: 0191 229 7333
email: homebuy@nomad-homes.co.uk
web: www.nomad-homes.co.uk

Merseyside
tel: 0845 603 4559
email: via website.
web: www.homeshub.co.uk

Greater Manchester and Lancashire
tel: 0161 447 5108
email: helen@plumlife.co.uk
web: www.plumlife.co.uk

Cumbria
tel: 0800 358 1400
email: enquiries@affordable-homes.co.uk
web: www.affordable-homes.co.uk

Cheshire
tel: 0845 112 8800
email: sales@riverside.org.uk
web: www.cheshirehomebuy.org.uk

North Yorkshire and Humberside
tel: 0800 633 5670
email: homebuy@jrht.org.uk
web: www.jrht.org.uk

West and South Yorkshire
tel: 0113 243 6893
email: enquiries@my4walls.co.uk
web: www.my4walls.org.uk

Summary

Inclusion in the KWL programme has given Service personnel a hitherto unavailable method of gaining access to affordable housing across all English regions and even more so in London, the South East and the East of England. This factsheet is designed to give an overview of the scheme and outline the main eligibility criteria. Any particular queries on KWL or a possible application should be directed to either the relevant Homebuy Agent or the Joint Service Housing Advice Office.

Frequently asked Questions

Q: Will members of the Reserve Forces/Territorial Army be eligible?
A: No because the MoD is not their main employer.

Q: Will Service personnel be able to apply for assistance from the KWL programme if they are deployed overseas?
A: Providing that their home base is within the eligible regions then there is no reason why they cannot apply for assistance from the programme.

Q: What happens if a Service person in receipt of assistance dies whilst on duty?
A: Death in service is one of the circumstances that does not trigger clawback. In such cases, sale of the property or transfer of ownership only would trigger repayment.

Q: What size house am I entitled to?
A: The Homebuy Agent must determine the current needs of the applicant’s household, taking into account the number of people in the household, their age and gender and other family circumstances e.g. where the applicant has divorced or separated and children visit on a regular basis, there may be need for an additional bedroom. As a guide, applicants are allowed one bedroom more than required based on their current household composition.

Q: Can my partner live with me?
A: Yes.

Q: What if any of my circumstances change?
A: You are obliged to inform the Homebuy Agent of any changes in your circumstances such as leaving the Service or you are posted away from the area in which the property is located within 7 days of the change.

Q: Can I use this scheme to upgrade my current home?
A: You will not be able to do this when your current housing needs are met by your existing property.

Q. What happens if I get divorced?
A. If, under the terms of a divorce settlement, the property is the subject to a transfer of ownership, the court will advise the Homebuy Agent (as one of the mortgagees) of this order. The Homebuy Agent will then ask to see the financial statement and agree with the Housing Corporation whether clawback should be triggered or be deferred.

Q. What if I leave the Services and move to another Key Worker profession?
A. Repayment of the loan will not be required as long as the new employment qualifies for Key Worker status under the scheme.

Q. How does the Housing Association ensure that they get their money back on sale of the property?
A. Their interest is secured through the lease.

Q. As I only own a percentage of the property do I only have to pay a percentage of the council tax?
A. No. You will be liable to the whole of all charges and bills associated with the property. This includes any legal fees and stamp duty land tax associated with the purchase.

Q. What happens if I leave the Service at the end of my engagement ie. Not through PVR or by giving notice?
A. Clawback will not be triggered and repayment of any assistance will only be required upon the sale of the property.

Q. What happens if I am posted outside the Key Worker Living area, including overseas?
A. The KWL scheme recognises the fact that military personnel are sometimes compelled to move to another part of the country for Service reasons. As a result of this, clawback will not be triggered as a result of a posting to another area. If you decide to sell the property as a result of the posting any assistance received will have to be repaid on a percentage basis. Shared ownership leases must prohibit sub-letting by the leaseholder to protect public funds and ensure applicants are not entering shared ownership for commercial gain. However, the housing association may consider, on a case-by-case basis, requests to sub-let in certain controlled circumstances. It is the housing association’s decision as to whether they agree to the request and permit sub-letting.

For information & advice on housing matters, contact:

THE JOINT SERVICE HOUSING ADVICE OFFICE
HQ LAND
ERSKINE BARRACKS
WILTON
SALISBURY SP2 OAG

TEL: 01722 436575
(SALISBURY Mil 2575)
www.army.mod.uk/jshao

PROVISION FOR SCOTLAND

As yet there is not specific provision for Scotand, although the MOD are currently working on possible schemes.

The Scottish Government website does hold some useful information

http://www.scotland.gov.uk/Topics/Built-Environment/Housing

as dones the this is the link to the information about LIFT – Low Income Initiative for First Time Buyers – which is a home buying scheme that is currently running in Scotland:

http://www.communitiesscotland.gov.uk/stellent/groups/public/documents/webpages/cs_008156.hcsp

 

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