With the Open Market Discount Scheme, properties are offered for sale to eligible purchasers at a discounted price of the full market value. For example, a £100,000 house with a 25% discount would be offered to eligible applicants for £75,000. This is not a shared ownership scheme and even though there is a discount on the sale price, the purchaser still owns 100% of the property. When you want to sell the property, you must do so on the same terms, which means you have to sell it with the same level of discount you received and to someone who meets the criteria for affordable housing.
‘Discount for Sale’ properties are subject to a Section 106 Agreement. A Section 106 Agreement can restrict how an affordable property is sold and who it is sold to, typical examples are key workers such as nurses, teachers and police officers. As such, not all lenders are happy to lend against a property with these restrictions and it is important to seek specialist advice from us before progressing with a mortgage application.