The living ain’t easy!

With average house prices in London now topping 280,000, it is understandable that many social care workers, particularly those with families, find it hard to imagine owning their own home.

Mindful of the impact expensive housing can have on the recruitment of public sector workers the government has developed schemes aimed at giving them a helping hand. Known as the Key Worker Living scheme, most of those initially benefiting from it were teachers, nurses and police officers, but more recently the government has been keen to promote it to social care staff, specifically social workers, nursery nurses, educational psychologists, and occupational therapists employed by local authorities or the NHS.

How does the scheme work?
The scheme provides housing assistance to key workers, including social workers employed by a council or the NHS. It is not just for first time buyers.
It aims to help 30,500 key workers find a home by 2010. It is targeted at key workers in London, the South East and the East of England where recruitment and retention problems are most severe. Since April 2004, more than 10,600 key workers have been helped into a new home through Key Worker Living.

What’s on offer?
Though eligibility criteria can vary across councils depending on local recruitment and retention priorities, there are three schemes social workers are eligible for in principle: Open Market HomeBuy, New Build HomeBuy and Intermediate Renting.

What is the eligibility criteria?
To be eligible for these schemes you must:

• Be a fully qualified social worker and have a social work degree/ diploma.
  
• Be unable to buy a home suitable for your household needs within a reasonable distance from where you work.
  
• Have a household income of less than 60,000.

What is Open Market HomeBuy?
This is a scheme that offers equity loans of up to 50,000 to help key workers buy a home on the open market. Key workers are typically expected to raise a mortgage of around 75 per cent of the property’s value. The equity loan can be used to make up the difference between the mortgage and the price of the property. You do not have to repay the loan until you sell the property or stop being a key worker. At the time you sell the property or stop being a key worker you will need to repay a percentage of the property’s value. The percentage will be the same as the percentage of the purchase price your equity loan covered. So if you gained a 40,000 equity loan to buy a home for 160,000, the loan would represent 25 per cent of the purchase price, and you would have to repay 25 per cent of the value of your home when you sell it or stop being a key worker.

• To qualify for this scheme you must have indefinite leave to enter or remain in the UK (excluding key workers from member states of the EU/EEA).
  
• From October 2006, following a major new agreement on the private financing of equity loans, lenders will provide a “top-up” equity loan alongside the loan being provided by the government. Lenders that will offer these “top-up” equity loans are HBOS, Nationwide Building Society and Yorkshire Building Society. There may be a small charge associated with the private lender’s loan. Full details of the new arrangements are still being finalised with the Council of Mortgage Lenders and the lenders themselves.

What is New Build HomeBuy?
This enables you to share ownership of a newly built housing association property with a registered social landlord. Under the terms of this scheme you would buy at least 25 per cent of the home and pay a reduced rent on the remaining share.

• You can increase your share in the future when you can afford it and you may even buy outright. If you sell the property, the percentage of the proceeds you receive is equal to the percentage of the property you own. If you stop being a key worker, you will no longer be eligible for help.
  

What is intermediate renting?
Available through housing associations, intermediate rent is set between what would be charged by a social landlord and what would be set by a private landlord. The accommodation is provided by a registered social landlord. You are likely to pay between 75 and 80 per cent of the local market rent. You would have an assured shorthold tenancy while you remain a key worker.

How do I join one of these schemes?

• Key workers can make applications to their local HomeBuy Agent: a registered social landlord that markets housing schemes including those for key workers across an area.
  
• Key workers should contact the HomeBuy Agent for where they work. Details for all HomeBuy Agents can be found at www.odpm.gov.uk/keyworkerliving

Frequently asked questions
Q: I work as a social worker but for a private sector employer. Am I still eligible?
A: No. One of the conditions of the scheme is that you are employed directly by the public sector.
Q: Is there a maximum income I can earn?
A: Yes. The maximum household income to qualify for help is 60,000.
Q: Can I get help if I already own a home but need to buy somewhere bigger to meet the needs of my family?
A: Yes.
Q: What happens if I need to move to a larger home when I start a family?
A: If you are still a social worker employed by a local authority or the NHS and meet the eligibility criteria you can sell the first home and carry forward the help you received.
Q: What happens if I cease to be a key worker? Will I have to repay the money?
A: Yes. For Open Market HomeBuy the equity loan must be repayed within two years from when you cease to be a key worker. Purchasers of New Build HomeBuy or shared ownership will have five years to sell their share in the property or buy the remaining share.
Q: If I go on a career break, will I have to pay the money back?
A: You can go on an agreed career break for up to three years. If you choose not to go back after this you will cease to be a key worker and begin repayments.
Q: Are key workers who are in the UK on work permits eligible?
A: If you are subject to immigration control you will be entitled to apply for rented accommodation available under the programme, provided that you meet the particular eligibility criteria for your sector of employment. Only key workers who have indefinite leave either to enter or to remain in the UK will be eligible to apply for assistance to buy a property.
Q: Are key workers on temporary contracts eligible?
A: Yes, in some circumstances. You will be eligible to apply for rented accommodation available under the programme provided that there is at least six months remaining on your contract. Depending on the length of your original contract and the time remaining, you may also be eligible to apply for HomeBuy products. CC