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Low cost home ownership

What is low cost home ownership?

Low cost home ownership units are properties sold at a reduced cost to people who are unable to purchase on the open market.

New properties are provided by private developers to meet their obligation to provide an affordable contribution on each new site developed in Aberdeen. They are advertised and sold directly by the developer to people who meet the qualifying criteria set by Aberdeen City Council.

Resale properties occasionally become available and will be advertised on the Council website. People who have expressed an interest in this type of property may be contacted directly regarding a resale opportunity.

Am I eligible to apply?

To be eligible for this scheme you need to meet the following criteria:

  • First time buyers
  • People who have a relatively modest income and can prove they would not be able to purchase a home to suit their needs on the open market.

Should any development by oversubscribed then Aberdeen City Council will place applicants in a priority list based on housing need. Properties will be offered to current tenants first, followed by those on the waiting list. Family sized properties will generally be offered to families rather than single persons.

How are applicants prioritised?

Priority will be given to current tenants of Aberdeen City Council or any registered social landlord in Aberdeen. Household income will normally be taken into account.

Consideration will be given to the applicant's suitability for the size of the property for sale, e.g. for a two-bedroom property a couple with a child would have priority over a single person.

How do I apply to buy a low cost property?

Each development will be individually advertised in the press, and listed on this website. Information on how to apply will be provided separately for each development and will be detailed in the advertisements for the properties.

What happens if I am offered a property?

If you are offered the property you will enter into a contract of sale with the developer which does not involve Aberdeen City Council in any form of liability. The developer may require you to pay a reservation fee which may be non-refundable.

You need to make sure you have money available to purchase the property. This may mean that you have to secure a mortgage.

You will pay for your share of the purchase price in the usual way (i.e. in the same way as if the property was for sale on the open market), along with any legal costs (including the cost of executing and registering a Standard Security in favour of the Council), survey fees and any other costs associated with the purchase including Stamp Duty (if applicable).

What happens next?

You will have full title to the property, although Aberdeen City Council will retain security over a proportion of the property through a standard security in the title deeds.

You do not have to pay any rent on the secured element of the property.

In some cases you may be able to increase your share in the property.  Details of if and when you can increase your share will be given in the guidance notes issued with the application form.

Purchasers of low cost properties are expected to occupy the property as their only and main home. In certain circumstances you may be allowed to let the property, however you should check with Aberdeen City Council before doing so.

As the homeowner you will be responsible for keeping the property in a good state of repair. You will be responsible for all repairs and maintenance costs and insurance as well as keeping up with mortgage repayments and paying your Council Tax. If your property has common or shared areas you will also be responsible for paying any common maintenance or service charges as detailed in the title deeds.

What happens if I want to sell the property?

As there is a discount involved in achieving the sale price there are conditions attached to the subsequent sale of the property. There is a standard security in your title deeds to ensure that the property remains affordable to future purchasers.

Generally if you wish to sell the property your solicitor will have to contact Aberdeen City Council in writing, providing a home report or other appropriate proof of current market value. The current market value will be used to determine the price you will receive for the property if you decide to proceed, based on the percentage rate you paid.

The cost of any capital improvements you make to the property may be taken into account when calculating the Market Value if you decide to sell the property. This will be decided on a case by case basis and you should not assume that you will recoup the full cost of any improvements you make. Generally any items which can be removed from the property, such as floor coverings, will not be considered an improvement.

It is important to remember that property values can decrease as well as increase (see examples below).

Example 1: Property has increased in value

Change Value
Initial Market Value of the property £175,000
You buy the property for 70% of market value £122,500
Increased market value of property  £200,000
Sale price to nominated qualifying purchaser (70% of Market Value) £140,000
You receive £140,000

In this example the value of the property has increased from £175,000 to £200,000

Example 2: Property has DECREASED in value

Change Value
Initial Market Value of the property £175,000
You buy the property for 70% of market value £122,500
Decreased market value of property £165,000
Sale Price to nominated qualifying purchaser (70% of market value) £115,000
You receive £115,000

In this example the value of the property has decreased from £175,000 to £165,000

The Council will then have a period of time to determine if there are qualifying purchasers interested in buying the property at the agreed price. At the end of this period the Council will pass the names of interested parties to your solicitor to arrange viewing of the property.

Should the Council be unable to nominate any qualifying purchasers, or if none of those nominated are able to proceed, you will be entitled to sell on the open market. In this case the percentage secured by legal agreement will be retained by the Council and used to help finance affordable housing in the future.

You will be responsible for the cost of obtaining the home report or valuation, and also for your own legal fees for the sale of the property.

Contact details

Housing and Environment
Business Hub 11
Second Floor West
Marischal College
Broad Street
Aberdeen
AB10 1AB

01224 522929

LowCostHomes@aberdeencity.gov.uk 


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