Key Worker Mortgages for up to 25 percent of a property’s purchase price may be available for key workers, in designated areas. As with other types of mortgage, the amount available to borrow will depend on your ability to repay the loan. Therefore, your level of income and financial outgoings will influence how much the lender is prepared to loan to you as a Key Worker Mortgage.

In order to obtain a Key Worker Homebuy Mortgage, the normal method is first to find a property and then to arrange a conventional mortgage from a financial institution of your choice, for 75 percent of the cost. Once this finance has been agreed, you are then in a position to apply for a Homebuy mortgage to cover the remaining 25 percent of the price of the property.

For a £180,000 property, you would obtain a conventional mortgage for £135,000 and a Homebuy mortgage (usually interest free) for £45,000. If you subsequently sell the property for £200,000, you would then be required to repay 25 percent of the value of the property at the time of sale (i.e. £50,000) to pay off the Homebuy mortgage. In this way, you would have gained at least £15,000 (i.e. £200,000 less £50,000, less £135,000) in equity to put towards the purchase of your next home.

Key Worker shared ownership loans operate in a broadly similar manner, but instead of buying a property outright, you would buy part of property (minimum 25 percent, maximum 75 percent), usually from a housing association and then rent the rest of the property.

For example, if you bought 50 percent of a £100,000 property for £50,000 and later the property was sold for £120,000, you would have to pay back 50 percent of the value (£60,000) to pay off the loan, leaving you with £10,000 (i.e. £120,000 less £60,000, less £50,000) in equity.

The number of available Key Worker Mortgages is limited. To find out what is available, you first need to contact the zone agent (a designated local housing association) for the area in which you work, in order to ascertain whether the type of job that you do qualifies you for a Key Worker mortgage in that area and to establish whether funds are available.

The Key Worker mortgage zones are administered geographically as follows:

• London
• Bedfordshire and Cambridgeshire
• Essex
• Hertfordshire
• Norfolk and Suffolk
• Rest of the South East (Berkshire, Buckinghamshire, Hampshire, Kent, Oxfordshire, Surrey and Sussex).

The aim of the Key Worker Mortgage programme is to help to recruit and retain key public sector workers in those parts of London, South East England and East Anglia where the high cost of housing would otherwise deter employment.

Main types of Key Worker Mortgage available:

• Homebuy loan – usually up to £50,000 towards the cost of purchasing a house or flat; in special cases (e.g. for certain senior school teachers in London) a loan of up to £100,000 may be available;
• Shared Ownership loan – only available for purchasing a part share (minimum 25 percent) in a new house or flat, usually from a housing association.

Public service employees in the following employment categories are permitted to apply for a Key Worker Mortgage:

• police officer or police administrative staff worker;
• fire fighter;
• prison officer;
• probation officer;
• nurse, paramedic or other NHS medical staff;
• teacher in a school or further education college;
• social worker, educational psychologist, or occupational therapist employed in local government.

A housing association manages the allocation of Key Worker Mortgages in each of the following areas:

• London
• Bedfordshire and Cambridgeshire
• Essex
• Hertfordshire
• Norfolk and Suffolk
• Rest of the South East (Berkshire, Buckinghamshire, Hampshire, Kent, Oxfordshire, Surrey and Sussex).

Not all categories of public sector employee will be entitled to Key Worker Mortgages, in all localities.