Key worker schemes: What are my options as a first time buyer?
Since the Key Worker Living Programme ended in 2019, nurses, police staff and teachers have faced the tedious task of searching for an alternative that’s both affordable and achievable as a first-time buyer looking for a mortgage.
The First Homes programme aims to provide a solution to this problem, providing a 30% discount on new homes for key workers including nurses, teachers and police officers as well as local first time buyers.
So what are your alternatives until then?
Some local councils, social landlords and private housing developers run their own initiatives, though these can vary depending on your local council, the part of the UK you live in and your own circumstances.
Finding a suitable scheme is the first hurdle, as you’ll also need to know which lenders are most likely to approve your mortgage application. This can be a complex process, which is why many key workers come to us for clarity.
We’ve created this short guide to explain the options that may be available to you but if you’re in a hurry, feel free to send your questions directly to the team via our website or Facebook page.
What is a key worker?
Teachers
Armed forces personnel
Police officers and community support officers in specified forces
Prison officers and some Prison Service staff in prisons in specified areas
Probation officers (senior or not) and, for intermediate rent only, trainee probation officers
Local authority (LA) or local education authority (LEA) or NHS social workers
Some civilian Ministry of Defence (MoD) personnel (ie clinical staff, MoD police officers and uniformed staff in the Fire and Defence Service)
Highway Agency traffic officer staff
LA environmental health officers/practitioners
Key worker schemes in the UK
The Key Worker Living Programme was disbanded in 2019 but the good news is that depending on your preferences and own circumstances, there may be several other schemes available that could help you get a mortgage as a keyworker.
To truly understand the most viable mortgage route for you, it can be helpful to ask a mortgage advisor who will know the current schemes available in your area as well as the lenders most likely to offer you the best rates.
Available schemes
Right to Buy
Right to Buy allows qualifying council tenants in England to purchase their council houses from their local authorities at a discounted rate.
The scheme was once available throughout the UK but is no longer active in Scotland and Wales.
With its primary aim to build one affordable rental house in place of every house sold, it maintains the level of affordable housing while also providing properties for those waiting to purchase.
Help to buy
Help to Buy offers first-time buyers an equity loan from the Government up to 15% of the total house price in Scotland, 20% in England and Wales, and 40% within London boroughs.
A big draw for many first-time buyers is that to be eligible for the scheme, you need only a minimum 5% deposit.
The Government loan is used to boost your deposit which can also help you access lower and more affordable mortgage rates, depending on your circumstances.
In the short term, Help to Buy can make for convenient borrowing and is especially great for key workers who cannot afford to put down a large deposit to secure a mortgage.
Shared ownership
Shared ownership is a scheme designed to help first-time buyers onto the property ladder by allowing them to own part of the home while renting the portion they don’t own.
Buyers can purchase a percentage of the property between 25-75%, with the remaining shares generally (although not always) being owned by a housing association.
Rent is also charged on the portion of the property that isn’t owned, so you’ll need to be able to commit to paying their own mortgage, their loan repayments and any rent.
As part of the shared ownership offer, you might have the option to buy further shares in the property as time goes on.
Shared ownership scheme is available for new and second hand properties and these properties are usually (although not always) sold with a leasehold of 99 years.
Do I have to be a first-time buyer to be eligible for these schemes?
Many of the schemes and programmes available to key workers are offered under the agreement that the applicant is a first-time buyer. However, that’s not to say that key workers looking to mortgage a second property won’t be able to access attractive rates and terms.
In fact, some mortgage lenders offer exclusive rates or schemes for key workers and working with a mortgage broker can help you to find them. Ask one of our experts about your eligibility for a mortgage as a key worker.
Can a mortgage broker help me find a key worker scheme?
Yes, working with a mortgage advisor can:
Highlight the key worker schemes you’re eligible for
Help you to understand the pros and cons of each scheme
Allow you to make an informed decision about which one is right for you
Your mortgage broker will also guide you through the process of applying for a mortgage as a key worker, saving you time and wherever possible and advisable, money.
