Discount Market Sale scheme - Babergh District Council

The Discount Market Sale (DMS) scheme helps residents who need affordable housing to achieve their home ownership goals. The scheme offers them the opportunity to purchase a property that would otherwise be unaffordable.

A DMS property is a form of affordable housing, which is sold at a discount of at least 20% below open market values. The owner will own 100% of the property, but they must pass on the discount to future buyers (this will also apply where the interests in a property are transfers of equity). No landlord or registered provider has an interest in the property; the owner will be responsible for all repair and maintenance costs.

Where DMS properties are secured, they will be restricted by planning obligation to make sure that a discount of at least 20% is applicable every time the property is sold or transferred, in perpetuity, to an eligible buyer. This is via a restriction on the title - which will apply for any sale, transfer of equity, re-mortgage, or any other form of disposal.

Not all DMS properties would necessarily be properties for first-time buyers, and purchasers may already have an amount of equity in an existing property that they wish to sell. This might include people who need a larger home as their family have grown, but are unable to afford market prices.

The process for purchasing a DMS property will normally be set out in a related Section 106 Agreement (as per the Town and Country Planning Act 1990) - including any deed of variation or supplemental deed - which is needed in connection with the planning permission.

A DMS property should be the owner's main residence, who has no other legal interests in any other property.

We have produced a flowchart which illustrates the sale procedure of a DMS property.

Eligibility criteria

A purchaser (or joint purchasers) should be at least 18 years old, and have a right of residence in the UK.

DMS properties cannot be purchased as buy to let properties, second homes, or holiday lets.

Eligibility checks will be carried out either by the developer (for initial sales), or - for resales - by the buyer's solicitor, or as agreed, in writing, by us.

Then - in either circumstance - confirmation that the buyer meets the Section 106 criteria should be sent to us via the relevant certificate:

The main eligibility criteria are as follows:

Affordable Housing Need

Household income does not exceed eighty thousand pounds (£80,000) per annum for single or joint purchasers
The deposit for the DMS home is no more than 65% of the DMS price in equity, savings or a gifted deposit (unless otherwise agreed in writing with us)
A purchaser should not have an interest legally or equitably in other property, including via trust (UK or abroad)
Purchaser is unable to afford a suitably market property in the area (Gross Income x 4 + deposit for single purchaser | Gross Income x 3.5 + deposit for joint purchaser)

Local Connection Criteria

A person would be considered eligible if they or a member of their household, meet one of these criteria:

Currently has their only or principal home in the district of Babergh or Mid Suffolk
Has been a resident within the district of Babergh or Mid Suffolk prior to the application for at least two (2) years
Has been employed permanently in the district of Babergh or Mid Suffolk and has done so for a continuous period of at least two (2) years
A person has immediate family connections (parent, adult child, brother or sister) whose only or principal home has been in district of Babergh or Mid Suffolk District Councils and has been for at least two (2) years
Needs to live in the district of Babergh or Mid Suffolk because they require substantial care from the relative who has lived in the district of Babergh or Mid Suffolk for at least the last six (6) months, or they need to provide substantial care to a relative who has lived in the district of Babergh or Mid Suffolk for at least the last six (6) months

The developer or seller’s solicitors can download the DMS eligibility criteria application form to carry out the necessary checks.

How to buy or sell a DMS property

Buy a DMS property

Initial sales

All new DMS properties will be marketed and sold via the property developer - prospective buyers should contact them directly.

It is likely that the properties will be advertised online (via the developer's website, as well as other marketing platforms), as and when they become available.

Resales

Resales will be advertised via local estate agents, and other online estate agency platforms. Please contact the agents directly if you are interested in purchasing an advertised property.

Please note: Before the legal team issue the compliance certificate, the seller's solicitor should email legal.services@westsuffolk.gov.uk to enquire about the fee (+VAT) and bank details.

You can also make the enquiry by post:

West Suffolk House

Western Way

Bury St Edmunds

Suffolk

IP33 3YU

If you are struggling to sell your DMS property

Unable to sell after eight weeks

We can 'cascade' the property by imposing a temporary relaxation of the Local Connection Criteria.

Renting out the property (after six months)

Owners of the DMS property must not allow any other person to live in the property, unless they form a part of the household.

Renting is allowed for maximum of two years on the premise that all the following criteria is met:

There is a genuine need to move
The property has been on the market for at least six months
Rent should be equivalent to 80% of the market rental property (affordable housing price threshold)
Owners are aware of the impact on the mortgage payments and insurance cover

After renting out for two years, the property must then be listed for sale for a further six months before applying to the Council for permission to resume letting.

If you are struggling to sell your DMS property, please contact our Strategic Housing team and we will try our best to help you.

Data protection

Babergh and Mid Suffolk District Councils shall comply with all applicable data protection legislation and privacy legislation in the UK including the General Data Protection Regulation (GDPR); the Data Protection Act 2018; and all other legislation and regulatory requirements in relating to the use of Personal Data and the privacy of electronic communications.