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How to Get a Mortgage as a Key Worker

NHS mortgage

Last modified:

November 25, 2019

Everything You Need to Know About Key Worker Mortgages and Property Schemes

Key worker mortgage schemes help those in certain job roles to get onto the property ladder. Knowing where to look, and finding which schemes are available, is confusing. That’s why we’ve put together this quick guide to help you find the best mortgage deal as a key worker.

Who is a Key Worker?

A key worker holds an important job role as a lynchpin of their local – and wider – community. This includes NHS staff, teachers, law enforcers, social workers, firefighters, or defence staff. Some job roles within these categories can take advantage of key worker mortgages. Others may not be eligible, or may only meet eligibility criteria in certain circumstances.

You can check your eligibility as a key worker in more detail in part two of this series Mortgages for Key Workers: Are You Eligible?

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What Is a Key Worker Mortgage?

Some mortgage providers offer special rates or schemes for key workers. This is to help them get onto the property ladder to secure their future as a homeowner.

The aim is to provide stability for those who work hard to develop, protect, and improve their communities. Only one applicant on the mortgage application needs to be a key worker to take advantage of the deals available.

Current Key Worker Property Schemes

Key worker mortgage deals available on property schemes mean you can take advantage of special rates to help you afford a home. What you’re able to get will depend on your location, job role, and the property scheme you’re buying property with.

Lending requirements, eligibility, and schemes all vary between providers and local authorities. There are three main types of key worker schemes you could access: Rent to Buy, Help to Buy, and shared ownership plans.

Local Authority and Council Schemes

Local authorities often offer preferential treatment to key workers trying to buy a house in their district. This may be presented in several ways:

  • Selling a portion of houses solely to key workers
  • Rent to Buy schemes
  • Key workers shared ownership options

Let’s take a look in more detail at each option.

Selling only to key workers

Local authorities may keep a portion of housing stock off the open market and offer it for sale solely to key workers.

The number of houses and property types available in this type of scheme vary from district to district. It may also be influenced by the number of key workers requiring accommodation in an otherwise-costly area. For example, cities with a dense population of hospitals, universities, and schools, like London, may offer more opportunities than rural districts.

Rent to Buy for key workers

Rent to Buy is a scheme offered by local authorities and councils to allow people breathing space to save for a house deposit. The scheme isn’t exclusive for key workers, but special preference or plans may be available to those who are eligible.

Rent to Buy for key workers involves setting an agreed sale price and date of purchase, then arranging a reduced rental rate for the time leading up to the purchase date of the property. For example, if you agree to buy your home in 5 years, you’ll pay around 80% of the market rate in rent per month for the next 5 years until you buy.

The agreed sale price doesn’t go up as time goes on: if you agree the price and the property increases in value in the time between the agreement and your purchase of the property, you’ll still pay the originally agreed amount. The same is true if the property decreases in value.

These schemes aim to reduce your rent to allow you to save up the deposit required to buy your home. It can also open opportunities when it comes to finding a mortgage to fund the purchase of your property.

Rent to Own in Wales

If you’re a key worker living in Wales, the system works slightly differently. Instead of renting at a reduced rate until it’s time to buy your property, you’ll rent at the full market rate.

However, when it’s time to buy, you’ll receive 25% of the rent you’ve paid back, to boost your deposit. You’ll also receive 50% of any increase in the value of the house since you joined the Rent to Own scheme; this is also to put towards your deposit to buy the property.

Key Workers Shared Ownership

Shared ownership is slightly different from Rent to Buy. However, many Rent to Buy schemes offer key workers a shared ownership route as part of the deal.

Shared ownership means you buy a percentage of the house and pay rent on the rest. This reduces your monthly rent to help you save money to pay off the rest of the property. You can buy additional percentage shares of the property over time until you own 100% of the house and no longer pay rent.

When it’s time to sell your home, you’ll benefit from any price increase on the value of the percentage you own. The local authority or council will also benefit from price increases on their share of the property.

Government Help to Buy for Key Workers

Help to Buy is a popular shared equity Government scheme available to first-time buyers and home movers purchasing eligible new build properties. Home buyers can take advantage of 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. You need only a minimum 5% deposit, and the rest of the sale price comes from a Help to Buy mortgage.

The scheme can be combined with the Help to Buy ISA. First-time buyers can save up to £200 a month, plus an initial transfer of £1200, up to £12,000. When it’s time to buy your home, the Government matches your savings with a 25% bonus, up to £3,000. If you withdraw your money without buying a property, you won’t get the bonus.

Two first-time buyers can each have a Help to Buy ISA, meaning you could benefit from a total maximum bonus of £6,000. If only one of you is a first-time buyer, that person can still use their bonus on a shared property purchase with a previous homeowner.

Help to Buy for Defence Staff

Ministry of Defence employees can take advantage of additional deals to combine with Help to Buy shared equity, shared ownership, and ISA schemes.

If you, or your partner, work for the Ministry of Defence, you may be eligible for special deals as part of the Government’s Forces Help to Buy scheme. Originally set to end in 2018, the scheme has been extended to at least 31st December 2019.

Defence personnel may be able to apply for a loan up to £25,000 – or 50% of their annual salary – towards a deposit and home purchase fees.

Finally: How to Find a Key Worker Mortgage Deal

Now you know where to look for key worker property schemes, it’s time to consider your mortgage application options, too.

The second part of this series Mortgages for Key Workers: Are You Eligible? looks in detail at key worker mortgage eligibility, including for those on an unconventional income such as NHS bank nurses or supply teachers.

If you’re a key worker ready to buy a house, it’s time to speak to an independent mortgage adviser before you do anything else. Our experts are highly experienced in finding key workers the best deals. They have access to whole of market deals – including ones you might not be able to find yourself – so it’s worth giving them a call.

Speak to an adviser today about your key worker mortgage options: call on 0208 835 7036 or fill out a contact form for a callback.

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