Low cost home ownership (LCHO)

What is it?

Low cost home ownership schemes make it possible for people to buy their own home who wouldn't normally be able to afford to. There are different types of low cost home ownership schemes and they are mainly operated by housing associations, but some councils also operate them.

The most common schemes lower the cost of buying by allowing you to only buy a percentage of the home and pay a subsidised rent on the rest. So, for instance, instead of getting a loan to buy a house for £100,000, you could buy a 50% (half) share of that property and only need a loan for £50,000.

You can see details of the different types of low cost home ownership schemes, and where to find out more about them, on the Applying For LCHO page: click here.

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What does it cost?

The cost of buying your own home through a low cost home ownership scheme will depend on several things:

• the price of the property you are buying
• the share of the property that you are going to be buying e.g. 25% or 50%
• the mortgage repayments (monthly amount that you need to pay off your loan to the bank or building society to buy your share of the propery)
• whether you will be asked to pay any rent on the share of the property you don't own (which will depend on which low cost home ownership scheme you buy through - click here to find out about the different schemes).

The weekly cost of buying a 50% share of a one bedroom flat priced at £125,000 and paying rent on the other half would be around £125. This compares to the £162 a week for the same property on the open market.

Costs of this type might be affordable to a household (which might include one or two wage earners) earning a total of between £20,000 to £25,000 a year (before tax). Buying the same flat on the open market would require an annual income of around £34,000 to £40,000.

The housing associations or councils operating low cost home ownership schemes should be able to advise you on whether the scheme they operate is affordable to you on your income. For more details about applying for LCHO, click here.

In London low cost home ownership isn't affordable for people on a low income or benefits - unless they have considerable savings. But income support can be paid on mortgage costs in some circumstances. For more details on help with housing costs, click here.

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Who is eligible for low cost home ownership?

There is a lot of demand for low cost home ownership in London and there are more people wanting to buy through the schemes than there are homes available.

Councils usually decide who can qualify for schemes in their area - including the ones operated by housing asscociations. The main priorities are usually:

• people who already have a council or HA flat
• people high on the housing register (click here for more details about the housing register)
• key workers

What is meant by 'key worker' might vary from area to area. Nurses and teachers are usually a priority but other jobs that can be included are:

• social workers
• bus drivers
• tube drivers
• fire fighters
• police officers.

There are also some schemes targeted at people with a disability or care and support need, such as:

• a learning disability
• mental health problem
• multiple sclerosis or
• HIV/AIDS.

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Click on these links to reach different parts of the website:
Private renting - Council or housing association - Buying your own home
Hostels - Jobs with accommodation - Moving out of London
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