Under the open market HomeBuy product offered in partnership with Yorkshire Building Society, which offers equity loans of up to 32.5 per cent. of the purchase price, buyers repay their equity loans to the HomeBuy Agent and the Yorkshire Building Society on resale of the property at the rate at which their home has increased in value. Assuming annual property price inflation over the period of the loan of (a) 4 per cent., (b) 8 per cent. and (c) 12 per cent. the equivalent notional APR of interest charged on the equity loans on resale of the property will be 4 per cent., 8 per cent. or 12 per cent. respectively.
In April 2006 four social landlords began piloting Social HomeBuy on a voluntary basis. The Social HomeBuy scheme allows participating local authorities and housing associations to offer tenants living in social rented accommodation the opportunity to purchase discounted shares of their home starting with an initial share of 25 per cent. The scheme will continue to increase opportunities for social housing tenants to access homeownership.
The majority of the 138 sales to end December 2007 have come from completions with the first phase of participating landlords, most of whom joined in late 2006. 135 sales were from housing associations and three were from local authorities. Since April 2007 a second phase of landlords have joined the scheme and are now offering Social HomeBuy to their tenants. As with normal home purchases it can take several months to reach completion.