Discount Market Sale scheme

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 on the open market.

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:

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.

Send us confirmation that the buyer and seller meets the obligations (as set out in the relevant Section 106 Agreement, or Deed of Variation) via the relevant forms:

Form 1 - Sale Agreed (to be completed by the seller's solicitor)
Form 2 - Declaration - Discount Market Sale Property Eligibility (to be completed by the buyer's solicitor)
Form 3 - Post Completion Sale (to be completed by the buyer's solicitor)

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(s) must demonstrate that they are unable to afford a suitable market property in the area. This is tested by the following formulas:
- For single purchasers: (Gross annual income multiplied by four) plus deposit = Less than or equal to the full market value of an equivalent property in the area
- For joint purchasers: (Gross annual income multiplied by 3.5) plus deposit = Less than or equal to the full market value of an equivalent property in the area

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

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.CommercialandProperty@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

Sell a DMS property

Step 1: Obtaining a valuation

The seller must provide a minimum of two (2) valuations from estate agents in determining the accurate open market valuation of the property. We would also accept the valuation from the Royal Institute of Chartered Surveyors (RICS) but opting for the RICS valuation would result in additional costs to the seller of the property

Step 2: Applying the Percentage Discount

As Section 106s will differ, it will always be necessary to refer to the Section 106 Agreement for the defined “affordable price”, this states the maximum percentage of market value you are able to advertise and sell your property
DMS properties sold through this scheme (either first sale or resales) will be sold at a discount of at least 20% below the open market value agreed by the Council

Step 3: Marketing and Sales

Once the Council confirms the valuation price, the sale process will follow the requirements of the s106 to ensure the DMS property is sold to an eligible person at a discount
If there are no applicants after eight (8) weeks of marketing the DMS property, then the property can be marketed to anyone in housing need meeting the financial criteria. But all the restrictions and requirements of the S106 will still apply

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.