Repayments

Repayments page

Repayments

Repayments under the First Time Buyers Initiative

Repayments

When you originally bought your FTBI home your mortgage would have been for a certain percentage of the property’s value (at least 50%) and you would have received financial help from the FTBI scheme to make up the rest. When you sell the property, you will repay the percentage of FTBI from a share of the total future sale proceeds. Therefore if you originally received 50% of the purchase price, your repayment will be 50% of the total value when you sell the property.  

You can repay all of this help, up to 100% and increase what you get when selling the property, at any time three months after the date you originally bought your home. The process of repaying this financial help is called a‘repayment’.

You will also make repayments when you sell your home. When this happens, by law, you must repay a share of the sale proceeds depending on the financial help you received from the FTBI scheme. For example, if you bought your home with a 70% mortgage and a 5% cash deposit and have made no other repayments, you will need to repay English Partnerships 25% of the total value when you sell.

The table below gives an example of how the payment to English Partnerships is calculated assuming an initial purchase of a home at £150,000 with the buyer taking on a mortgage for 70% and paying a 5% deposit.  

Back to top
Start of year Estimated total property future sales value
assuming it increases by 5% each year		 FTBI owner mortagte and initial deposit 75% FTBI partnerships entitled 25% to be repaid by FTBI
owner from future sale
1  £150,000  £112,500 £37,500
 2  £175,000  £118,125 £39,375
 3 £165,375
  £124,031 £41,344
 4 £173,644  £130,233 £43,411
 5  £182,326 £136,744 £45,581
 6  £191,442 £143, 582 £47,861
       

In the example above, if an owner chose to sell their home at the start of year six (after owning the property for five years) and assuming property values increased by 5% every year, the owner would have to repay £47,861 to English Partnerships and retain £143,582 to settle the outstanding balance on their main mortgage.  

The amount you have to repay English Partnerships will depend on the rate of house price growth and the market value it is eventually sold for. 

The benefits of making repayments

Once you make a full repayment, you do not have to pay any fees.

As a result, if you make a full repayment before the fourth anniversary of buying your property, it means you will never have to pay any yearly fees.

For this reason we recommend that, if you can, you should consider repaying the financial help you used to buy your home as soon as possible. English Partnerships, who originally gave you the financial help for your home, will use any money they receive from repayments to re-invest in providing further affordable homes for future first-time buyers.

Back to top

The process explained

If you are interested in making a repayment, you should e-mail, write to or call us using the contact details listed in the ‘contact us’ section of this website.

Once you have contacted us, we will send out an information pack, within five working days.

We will either approve or refuse your request within five working days of receiving the documents we need from your solicitor. We will clearly explain this within your information pack. The process will involve getting an independent market valuation of your home to see its current open-market value. The cost of repaying the financial help will be based on this. An independent surveyor or valuer, who is a member of the Royal Institute of Chartered Surveyors (RICS), must provide the valuation and it is your responsibility to pay for this.

We will write to you and your solicitor to confirm that the valuation is appropriate, and confirm you still want to proceed.

If you increase your entitlement to 100% of the future sale proceeds you will no longer have to pay us fees, you may still have to pay service charges even if you have made full repayment to English Partnerships.  

The final stage will be for the English Partnerships mortgage deed on your property to be discharged at the Land Registry.  

Back to top

Information on Staircasing

If you do not want to make a full repayment, you can choose to make a part repayment of at least 10%. This is called staircasing. When you originally bought your FTBI home you will have got a mortgage for a certain percentage of the property’s value (at least 50%), and received financial help from the FTBI scheme to make up the rest. When you sell the property, you will repay the percentage of FTBI help from a share of the total sale proceeds. Therefore if you originally received 50% of the purchase price, your repayment will be 50% of the total value when you sell the property. 

You can make part repayments and decrease the amount of English Partnerships percentage by a process known as staircasing.  You can staircase at any point three months after you originally bought your home. You can decide how much you buy although it must be at least 10% of your home’s market value

Back to top

Clawback

If you are a key worker, employed in a qualifying Key Worker Profession (see attached)  then repayment will also be triggered by ‘clawback’. This means you originally qualified for the scheme because of your job as a key worker, but you then leave that qualifying profession.

You must notify us of you leaving that qualifying profession in writing within seven days of leaving or changing your job.  You will have five years from the date you leave your eligible employment to repay the financial help made as a contribution towards the purchase price of your home. You can do this by either making a full repayment or by selling your home on the open market.

Clawback will not apply if you take an agreed career break for up to three years. If you choose not to go back after this three-year period, you will no longer be a key worker on the last day of the three-year period. You will then have five years after this three-year period before we enforce the repayment terms.  You can agree a career break with your employer for up to 12 months without having to tell us about it. If you want a break of between 12 and 36 months, you must also get our permission.  You will still have to pay any fees due on your FTBI home during any career break. 

We will judge whether you qualify as a key worker using the conditions at the time you were originally given financial help to buy your home through the FTBI scheme. If we no longer consider your qualifying key-worker profession eligible, due to changes in the scheme, as long as you stay within your original qualifying profession, you will not be affected by clawback. You can find more information about clawback in the frequently asked questions section.

Back to top

Selling

You can choose to sell your property at any time. You must sell the property on the open market at the prevailing market valuation. When you sell, you must repay the financial help you received on the purchase of your property (as a percentage of the total sale proceeds). You are responsible for paying the costs of selling, including for the home information pack (HIP).

Back to top

Financial advice

We recommend that you get advice from an independent financial advisor (IFA) to make sure you are not stretching yourself financially. When you staircase or want to make a full repayment, you could consider discussing it with your existing mortgage lender. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. 

If you are changing the terms of your mortgage, or arranging a new loan from another lender, you must ask our permission before agreeing to a new mortgage or loan offer. 

Back to top

Your responsibilities

All of the conditions governing repayments, including how we decide on the valuation of your property, are shown in English Partnerships buyers’ charging document and mortgage deed which you signed when you originally bought your home.

This document gives us certain powers and responsibilities. 

Back to top

Your home may be repossessed if you do not keep up payments on a mortgage or any other debt secured on it.

Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it.  If you are in any doubt, seek independent advice.