A housing lifeline for Oxford teachers
Oxford City Council has teamed up with a leading Oxfordshire housing association to provide a new £1.5 million loan scheme to help the city’s teachers get on the housing ladder.
Catalyst Housing and Oxford City Council have launched the Oxford Equity Loan scheme today, to teachers at selected Oxford schools. The scheme provides a low-cost equity loan, free for the first two years, which when taken up in addition to a normal mortgage, could enable teachers in the city to buy a home near to work that would otherwise be out of their reach.
The Oxford Equity Loan scheme could make the difference between teachers being able to stay working in Oxford, or having to move away from the city. It was devised by Catalyst and the city council in response to problems with recruiting teachers to many of the city’s schools. Money for the loans will come from a fund set-up by Oxford City Council and Catalyst, who have each contributed £750,000.
Councillor Pat Kennedy, Oxford City Council’s Board Member for Young people, Schools and Skills said:
“Staffing Oxford’s schools is an ongoing challenge – especially those in the most disadvantaged communities in the City. The high cost of housing in Oxford means that teachers are living further and further away from the schools where they work. The impact is greater with teachers in leadership roles, because they are key to raising education standards for our children.
“The Council has responded to these challenges by increasing funding, matched by Catalyst, which will mean help will be available to all leadership staff, whether they are already in post or have been newly recruited.”
According to data from the Centre for Cities and Professor Danny Dorling of Oxford University, Oxford is the least affordable place to buy a home in the UK. As Clive Gorton from Catalyst explained:
“Average house prices in Oxford are over 16 times the city’s average annual income – the highest ratio of anywhere in the UK. The unaffordability of housing in the city makes it much harder for people to get a mortgage to buy a home here, without help from the ‘bank of mum and dad’.
“This Equity Loan scheme that we’ve developed with Oxford City Council will give local teachers a golden opportunity to buy a home near where they work, so they can keep working in Oxford and put down roots in the city. And, because the Equity Loan is interest free for the first two years, it makes it that bit more affordable.”
How the Equity Loan scheme works
A Catalyst low-interest equity loan tops-up a mortgage to enable someone to buy a home that they would otherwise not be able to afford. It’s a separate loan in addition to a mortgage and a deposit.
Example (Note: this is an illustrative example and doesn’t relate to a real person):
Lucy is a primary school teacher in Oxford. She has a long commute to the school where she works and wants to live nearer her workplace. She and her partner have savings of £15,000. She’s found a flat in Headington – around a mile and a half from her school – but cannot get a mortgage for the £285,000 difference between their deposit and the flat’s £300,000 asking price. The bank will lend £210,000 – leaving Lucy and her partner with £75,000 still to find.
Property price £300,000
Maximum Mortgage £210,000
Left to find £75,000
The Oxford Equity Loan could fill this gap and enable Lucy and her partner to buy the flat. Catalyst Equity Loans are available on any house or flat that is available on the open market – not just newly built ones – and, just like when buying any home, buyers can find their home using any estate agent or property website.