HOLD Shared Ownership Scheme for the Disabled - How Does It Work?

15/10/2019
The HOLD shared ownership scheme - HOLD stands for 'home ownership for people with long term disabilities - offers disabled people a path to home ownership. The scheme - which is specially tailored towards the needs of the long term disabled - is essentially based on shared ownership rules and there are particular additional eligibility criteria to satisfy. This article, aimed at disabled people and/or their carers or family, addresses these matters and looks at:



Thinking of using the HOLD scheme for buying a home for a disabled person?

Our property lawyers are experienced in all forms of shared ownership conveyancing and are sensitive to the special requirements of the HOLD scheme for disabled shared ownership.

You can rely on our team of professionals to guide you efficiently from application to moving in.

* Sensitive, Experienced Property Lawyers - Fixed Fee – Shared Ownership Professionals – On all Mortgage Lender Panels


    1

    What is Shared Ownership?

Shared ownership is a form of low-cost home ownership where you buy a percentage (normally 25% to start with) of a property from a housing association and pay rent on the rest. Because it is aimed at people with smaller incomes and first time buyers, there are various eligibility criteria which only allow certain applicants to apply.

Certain shared ownership schemes are aimed at particular groups which the Government judges as being in particular need, such as the older people's shared ownership scheme.

You can find expanded details on eligibility and much more in this article - What is Shared Ownership?


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    2

    What are the HOLD scheme's eligibility rules?

These eligibility conditions are specific to the HOLD scheme. The normal eligibility conditions for Shared Ownership also apply.
  • Over 18
  • Long term disabled only (includes (this covers physical and learning disabilities, cognitive and sensory impairments and enduring mental health issues)
  • Limited to people unlikely to be able to work
If the applicant has a learning difficulty and/or autism then they must be:
  • eligible for high or middle rate care Disability Living Allowance (DLA)/ Personal Independence Payment (PIP), or Attendance Allowance for over 60s
  • have a clear credit rating, no judgements/ court orders in relation to debts, bankruptcy and no borrowing or rental debts in the past
  • have capacity to manage their property and affairs or someone acting on their behalf (Court Appointed Deputy etc)
  • be on the electoral role or have ID
  • not be able to gain employment replacing their benefits in the future ◦ no criminal convictions


    3

    Which disabled groups is the HOLD scheme aimed at?

The scheme is chiefly aimed at improving care and support for people with a learning disability and/or autism who display behaviour that challenges, including those with a mental health condition.

It's for those with very specific housing requirements. Some disabled people have complex and challenging behaviours often require tailored solutions that will minimise the triggers for behaviour, in some cases with significant adaptations and/or modifications, and where location and environment are very important in achieving sustainable housing solutions for people.

Where the person lives, who they live with, the design of their home and how they are supported (including in an environment that they are comfortable with) can have a significant impact on well-being and behaviour. Home ownership under the HOLD scheme enables the person and their family to select a property from the open market, within their budget, just like everyone else who is looking to buy a property.


    4

    How does the HOLD scheme work?

  • The housing association buys the chosen property with the disabled person and their family.
  • To buy its share of the property, the housing association uses grant funding from the Homes and Communities Agency (HCA) which helps to keep the disabled person's rent low.
  • On the same day, the housing association sells a share of the home to the disabled person.
  • The subject uses a mortgage to pay for their share, with mortgage repayments covered by a repayable loan called Support for Mortgage Interest (SMI) (more below).
  • The housing association may retain responsibility for many of the repairs and maintenance that shared owners may need help and support with.
  • The subject pays rent on the unowned share and service charges in the normal fashion for shared ownership and the service charges covers the repairs and maintenance.
  • The rent and service charge, most importantly, is eligible to be covered by the subject's housing benefit.
  • When the subject moves or dies, the property is sold and the grants from the HCA are paid back to be recycled and invested into other property.

What is Support for Mortgage Interest (SMI)?

SMI is a Government loan (before April 2018 it was paid as a benefit). The loan needs to be repaid when the property is sold or transferred, subject to available equity. In these cases, the mortgage provider will retain First Charge on the property and receive its money back when it's eventually sold, as will the housing association.

Other funds used for the purchase are secured via a Second Charge. Once the First and Second Charge obligations have been fulfilled, the Department for Work and Pensions (DWP) is able to claim back the money paid out via SMI. If the amount of equity available after the sale of the property is less than the amount due to be recovered the balance will be written off.

For example; a claimant has an SMI loan of £10,000, when the property is sold the equity available after clearing prior charges is £8,000. DWP will recover £8,000 and write off the balance of £2,000. The person might also benefit from any uplift in the property price at point of sale, which could offset the loan in some circumstances.

It is important to understand in detail what SMI is and how it works. It's also important to be aware of the length of the mortgage term and to plan accordingly for the end of it when the loan will need to be repaid in line with Government guidance.



    5

    What are the benefits of the HOLD scheme?

  • Security of tenure (no eviction/notice threat) with a separation of accommodation and support to empower the person
  • Personalised to a particular person's needs
  • Choice and control, for example over who might live alongside the person involved
  • Promotes natural relationships – live in an 'ordinary house on an ordinary street'
  • Long term settled accommodation – this can particularly suit those with autism and/or a learning difficulty. By some estimates, 79% of HOLD buyers since 1999 are still living in the same property and 80% of these have a learning disability or autism (figures from My Safe Home)


    6

    What are the HOLD scheme's limitations?

  • The scheme is not suited to people assessed as having severe challenges with living alone and/or who need relatively continual care.
  • Additionally if an applicant has a criminal conviction, they're more likely to have issues in securing a mortgage.
  • The person involved must be unable to work so the full time working disabled will be refused.
  • Not all mortgage lenders offer a HOLD mortgage.
  • Buying a house is hard work – not everyone is capable of carrying it out.
  • Government policies, particularly the SMI loan and Housing Benefit covering mortgage repayments, are subject to change, possibly to the detriment of some HOLD scheme users.


    7

    How do you find a HOLD property to buy?

You should firstly visit your regional Help to Buy Shared Ownership website (if you don't know this, please visit https://www.helptobuy.gov.uk/equity-loan/find-helptobuy-agent/, then look for the HOLD scheme, fill out an online application form to register interest then search for a property, using the same website. 

An example of the form you fill out to search for a property, for example HOLD shared ownership London, is on this web page - https://www.helptobuyese.org.uk/property-search

MySafeHome (My Safe Home scheme) is an organisation which provides advice and help with mortgage funding for the HOLD scheme.


Thinking of using the HOLD scheme for buying a home for a disabled person?

Our property lawyers are experienced in all forms of shared ownership conveyancing and are sensitive to the special requirements of the HOLD housing scheme for disabled shared ownership.

You can rely on our team of professionals to guide you efficiently from application to moving in.

* Sensitive, Experienced Property Lawyers - Fixed Fee – Shared Ownership Professionals – On all Mortgage Lender Panels


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