Human Resources Division

Shared Equity Scheme

1. Introduction

The shared equity scheme set up by the University of Cambridge exists to provide financial assistance to new members of academic or academic-related staff with the purchase of living accommodation in the Cambridge area, where they have to relocate to take up their appointment and encounter difficulties doing so. In this case, the University may pay for a direct share in the equity of a property purchased by a member of staff (and possible co-owner) as their primary residence, i.e. the University will buy the chosen property jointly with the member of staff and have a charge over it.

The scheme thereby supports the mission of the University to ‘contribute to society through the pursuit of education, learning and research at the highest international levels of excellence’ by ensuring that the University continues to be able to attract staff of the very highest calibre.

2. Overview of policy

The shared equity scheme in overview is structured as follows:

  • Eligible to new members of staff in the following categories who need to relocate to take up their appointment (within UK or internationally): Professors, Readers, Lecturers and Academic Related Staff at Grade 9 and above
  • Maximum of £250,000 or up to 50% of the total equity (purchase price) of the property, whichever is the lesser.
  • The funds are available at completion of purchase contracts i.e. they are not to be used at exchange of contracts towards a deposit.
  • For the purchase of a primary residence, which is a freehold property located within 20 miles of Great St Mary's church in central Cambridge.
  • The member of staff may purchase the property with a co-owner – whether spouse, partner, co-habiting couple or civil partnership.
  • The purchase may be subject to valuation of the property by the University's valuer and possible engineer's report (at the cost of the member of staff), in addition to the applicant obtaining full reports as listed under Section 4.
  • Interest will be charged on the University's contribution to the purchase price, at the rate of 2% above the Bank of England base rate.
  • The University reserves the right to exclude any property for whatever reason from the scheme.

3. To whom does it apply/eligibility

Eligible to new members of staff in the following categories who need to relocate to take up their permanent appointment (within UK or internationally):

  • Professors
  • Readers
  • Lecturers
  • Academic Related Staff at Grade 9 and above

4. Full policy details

Mortgage provider

  • The University's participation must be linked to a mortgage with the Cambridge Building Society.
  • The member of staff is expected to take independent financial advice with regard to their borrowing as necessary.
  • The University while having a charge over the property has no responsibility for any mortgage payments to the provider.
  • Where the member of staff is a non-UK resident, they will need to satisfy themselves with regard to the workings of the UK property market and the overriding ethos of ‘buyer beware’ by taking appropriate expert advice (for which they may be charged). The Cambridge Building Society is able to provide some limited advice on the UK process for purchasing property and the legal implications.

Conditions of acceptance

  • Valuation by the lender's valuer. At the University's discretion the valuation may be checked by an in-house University valuer and an engineer's report may be required (at the cost of the member of staff).
  • Unless buying a new build property, the member of staff must obtain a full building survey, an open market valuation and a reinstatement valuation for insurance purposes, all three to be shared with the University (Cambridge Building Society may be able to provide contacts for this work). The University will then decide if the property is suitable to be included in the scheme.
  • The purchase is also subject to a satisfactory environmental assessment and flood report having been obtained. These should be obtained prior to any other solicitors work being carried out. The purchaser is recommended to first check with Environment Agency's website.

Excluded property

  • Properties being bought off-plan from a builder/developer.
  • Plots that are bought to develop an individual property.
  • Properties requiring major redevelopment or refurbishment.
  • Properties subject to major environmental matters (e.g. untreated contaminated Land, extreme risk of subsidence).
  • Properties for which buildings' insurance cannot be obtained.

Insurance arrangements

  • As part of its conditions of shared ownership, the University will arrange buildings insurance as part of its block property policy. The premium will be apportioned according to equity shares with the relevant percentage cost of the insurance being recovered from the member of staff (and co-owner if applicable). Details of cover will be provided via the University's solicitor after completion and thereafter once a year via Estate Management.
  • Contents insurance will not be arranged by the University, however details of an independent contents scheme will be notified to scheme participants. There is no requirement for participants to buy cover through the independent scheme, although participants are encouraged to arrange contents insurance (Cambridge Building Society will also provide a quote if desired). Please see the participant's pack for details.
  • The individual will need to provide evidence of their life insurance arrangements upon entering the scheme (in exceptional cases, this requirement may be waived by the Director of HR).

Participation in other shared equity schemes

  • Staff cannot participate in the University shared equity scheme and any other college shared equity scheme simultaneously. These schemes are separate and mutually exclusive.

Tax

  • It is likely that the Inland Revenue will regard the arrangement as conferring a taxable benefit for income tax purposes on the member of staff. This liability is entirely the responsibility of the individual.
  • Please see the Participant's Pack for further details.

Legal costs

  • The member of staff is responsible for all their own costs.
  • In addition, the member of staff is responsible for all legal fees, estate agent's costs, Stamp Duty Land Tax, Land Registry fees and any expenses incurred by the University in connection with the purchase and subsequent disposal of the property or any other dealing under the shared equity scheme.
  • The University will undertake its own five yearly revaluation at its own cost.
  • Please refer to the Participant's Pack for full details.

Confidentiality

  • The scheme is to be kept confidential and members of staff must agree not to make any announcement in relation to it, or otherwise publicise its existence or its contents without prior written approval of the University.

Leaving the University

  • If the individual leaves the employment of the University for any reason, they must give notice of sale, or alternatively they must buy the University's share of the property within 24 months.
  • Please see the Participant's Pack for full detail.

Divorce or separation

  • If the member of staff becomes divorced or separated from their spouse, or becomes estranged from their partner or co-owner, then they must arrange to buy out their interest (if any) in the property. This would be at the member of staff's own expense.
  • If legally obliged to do so under matrimonial homes rights legislation, the individual must arrange to have their spouse/partner/co-owner re-housed.
  • Alternatively, the member of staff can give notice to sell the property, in line with the terms of the Trust Deed.
  • Whichever of the above actions is pursued, it must be completed within 24 months of the divorce/separation.

Death

  • In the event of the death of the member of staff, the University's share will need to be bought out or the property sold within 24 months. It is recommended that participants arrange life insurance so that such costs can be met.

Termination of the scheme

  • The University reserves the right to close the scheme to new entrants at any time.

5. Process/Procedures

If a member of staff is eligible for the scheme and they wish to participate they should complete the application form within 12 months of joining the University and send it to the Director of HR. They will they be sent a participant's pack with full details of the scheme.

Once ready to proceed the individual should inform the University's Director of HR of the details of the property they wish to buy, its price and other relevant details. The house purchase must be completed within 24 months of joining the University.