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How The Home Appreciation Loan Works

 
 
The Home Appreciation Loan is not a grant. It’s an equity release loan but with no monthly payments to make. 
 
You only have to repay the loan when you no longer own your home, for example if you sell it.
 
It allows you to carry out work to repair or improve your home without having to make regular repayments like a normal loan would do.
 
When it comes to repaying your loan, the amount you’ll repay is based on how much your property has changed in value when you sell it, or no longer own it.
 
There is no set repayment term.
 
 
 
 
 
 
 
 
 

Benefits

 
  • It allows you to live in a warm comfortable home.
  • You don’t have to repay any part of your loan until you no longer own your home.
  • You don’t need to worry about falling behind with repayments. 
  • This is a council backed scheme.
  • We’ll support you throughout the process.
  • You don’t have to pay any of the standard set-up or legal costs.
  • The amount you borrow is protected against negative equity.
  • There’s a loan repayment limit to protect you against exceptional rises in house prices.
 

Repaying the loan

 
The Home Appreciation Loan isn’t like a normal loan:
 

  • There is no set repayment term.

  • There are no monthly repayments.

  • The loan is repaid when you sell your home, move, or when you die.

 
For joint owners, the loan is repaid on the death of the last owner so long as all owners live in the home when the loan is taken out. If all owners do not live in your home, please contact your local authority for more information.
 
When you repay the loan, we’ll carry out a new valuation of your home. This valuation will be used to work out the amount of loan you will pay back. 
 
If the new value of your property is higher than when your loan was taken out, the amount you will be required to repay will be the lower of:
 
  • the percentage we worked out when you first took the loan, but of the new value of your home, or
 
  • the original loan amount plus a fixed limit by which the repayment value of your loan grows.  This limit is to protect you against exceptional increases in property prices.
 
However, if the value of your property is lower than when your loan was taken out, you will be asked to pay back a maximum of the original loan amount.
 

How does the loan work?

 
You can borrow the amount of money you need to repair, improve or adapt your home, and any supporting costs (subject to certain limits).   We convert this to a percentage of the current market value of your house at the time you take out the loan. The loan is secured as a legal charge against your home.
 
When the loan is in place, your contractor can start work.  When the work has been completed to our satisfaction, we’ll pay the contractor directly.
 
When you sell or no longer own the house, we use the percentage to work out how much you should repay. This is based on the value of your home at that time.

Example of how the loan works

 
Please see the attachment below for an example of a loan illustration - this shows how the loan works and you'll be able to see;
 
  • how the loan amount is calculated 
 
  • the changes in the value of your home over the next 15 years
 
  • how your loan repayment would be affected.
 
 
A caseworker at your local authority will be pleased to explain further for your own circumstances.

Who is the loan for?

 
Anyone who owns their home and
 
  • is vulnerable, for example on a low income, on certain types of benefits, such as people who are elderly, in poor health, or unable to access commercial loans, and
  • is over the age of 18 and
  • has enough equity available in their home.

What is the loan for?

 
  • Essential repairs and improvements to your home such as fixing faulty electrical wiring or a leaking roof.
  • Work to bring your home up to a decent standard such as improving old kitchens and bathrooms.
  • To help you pay your contribution to a Disabled Facilities Grant or where the cost of the work is more than the maximum grant available.
 

How we will help

 
We’ll help you decide what work is needed, what help you can get and what can be covered by the loan.
 
We’ll help you all the way through the application process by:
 
  • helping you to fill in your application
  • keeping in touch and answering your questions
  • making sure the loan is fully paid out and the work to your home is done properly.

Testimonials

 
“All the paperwork is quick and understandable”
Mr and Mrs Hanson, Doncaster
 
“I think the service provided by the Homes and Loans Service was excellent”
Mr and Mrs Ross, Wakefield
 
"very good with very clear communication.  Things were dealt with in matter of days when needed.  It was good that the contractors dealt with the council directly.  I'd be happy to recommend this scheme to neighbours."
Ms D, York

"Excellent!  It runs very smoothly with no waste of time.  It's well worthwhile."
Mr T, York

"The service is invaluable, it takes any additional worry away from me.  The service was very professional, caring and reassuring.  They had the expertise to sort things out."
Mr Borman, Richmondshire
 

How can I get  more information?

 
For answers to other questions you may have, see our Frequently Asked Questions page
 
or if you want to find out if you qualify for a loan, contact your local authority.
     

 
Documents
 
Example of how a Home Appreciation Loan works
Example of how a Home Appreciation Loan works  (37.5 KB)
 
 
 
Generated: 31/03/2009   |   Modified: 02/07/2009

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