Your guide to low-cost. Home Ownership

Transcription

1 Your guide to low-cost Home Ownership

2 All about A2Dominion New Homes A2Dominion New Homes is a major provider of low-cost, high-quality homes in London and southern England. A2Dominion New Homes is part of the A2Dominion Group. This was formed in October 2008 as a result of the merger of A2Housing Group and Dominion Housing Group. Our aim is to be an organisation that is recognised as the provider of choice in high-quality housing. Our objectives include developing a range of homes that meet the needs of the people we are aiming to help. We are a not-for-profit organisation. We work with the local councils where we build our homes and the Homes and Communities Agency to develop new homes. A2Dominion New Homes aims to provide over 1,000 homes for part-buy, part-rent from 2008 to 2011 and 500 homes for private sale. We manage 33,000 homes already and have thousands more in the pipeline. From January 2010, our private sales arm A Plus New Homes came under our overall sales and marketing programme. This has given us a new brand which takes in both affordable homes and open market sales. All our sales will now come under the name A2Dominion New Homes. Contents What is New Build HomeBuy? - also known as Shared Ownership or part-buy, part-rent. 4 Why buy through New Build HomeBuy? 5 Can I apply for New Build HomeBuy? 6-7 What will it cost me at first? 8-9 Can I buy a bigger share in my home? 10 What happens if I want to sell? 12 What do I do if I want to buy a property? What are the costs once I ve moved in? Our selection and allocation policy Our equal opportunities policy 22 How do I apply?

3 What is New Build HomeBuy? Why buy through New Build HomeBuy? New Build HomeBuy, also known as shared ownership or part-buy, part-rent, is a scheme to help people who can t afford to buy a property outright on the open market. It allows you to buy a share in your new home and pay us a subsidised rent on the part you don t own. You will buy your home on a lease, which will usually be 99 to 125 years for new homes. If you are buying a second-hand property, the length of your lease will be based on the number of years that would have been left on the original lease. What will I own? You will own an equity (share) of the property, based on a long lease. A lease is a legal agreement between you and the landlord. The lease is usually based on a model lease published by the Homes and Communities Agency. It covers you and our responsibilities including maintenance, rentsetting, buying more equity, selling the property and buildings insurance. If you buy through New Build HomeBuy, you will own part of your home rather than just paying rent with nothing to show for it. Your monthly mortgage and rent can work out much cheaper than buying outright, and sometimes not much more than renting. You can buy more shares (known as staircasing ) or move if you want to. You only buy what you can afford so you don t overstretch yourself financially. There are two types of costs when buying a New Build HomeBuy property: 1 What it costs you at first (see pages 8 and 9) 2 Continuing costs (see pages 16 and 17) 4 5

4 Can I apply for New Build HomeBuy? You can apply for New Build HomeBuy if you can t afford to buy on the open market. We give top priority to: 1 Council and housing association tenants 2 People already living and working locally and on the council s housing register (waiting list) 3 Key workers (these are people in jobs that the local council or the government feel are important to society - for example, police, firefighters, teachers, nurses and so on) 4 People registered with Housing Options or the local HomeBuy Agent. But if you are privately renting or living with your family or friends, you can still apply. Even if you have owned a home before, you may be able to buy through shared ownership if: 1 You owned a home with a partner, and that relationship broke down or your home became unsuitable for your needs 2 You need to move because your job is moving or 3 You are already a shared owner who needs to move and you meet all our other conditions If you re a council or housing association tenant, you ll have to give up your tenancy when you buy with us. You will not be able to apply if you have been behind with your rent in the past six months or you are already named on a mortgage or property deed. How much do I have to earn? There is a lower income limit for each home we sell. The amount will depend on the size of the home and where it is. Also, you should not be able to afford to buy the home outright. Is there an upper limit on my earnings? Again, this will depend on the home you want to buy. We cannot accept your application if your income or savings are high enough to buy a similar home on the open market. To find out if you qualify, you will need to have an assessment with an independent financial advisor. Then we will offer you the highest share you can afford to buy. You have to buy as much as you can afford, which means you could own up to 75% of the property straightaway. Must I have a job? Yes. You must have been in a permanent job for at least six months or have passed any trial period. But if you are a key worker, this condition might not apply to you. If you are self employed, you ll need to have two years audited accounts. Will you check my finances? We ll carry out a detailed credit check before we offer you a home. So if you have ever had a County Court Judgment (CCJ) against you or if you have failed to meet the repayments on a loan, we may not be able to help. If the CCJ has been cleared, please send us details and we will decide whether you qualify. We cannot accept an application from anyone who has had a County Court Judgment or defaulted on a loan of over 250 that has taken longer than six months to be cleared. If you have had any debts covered by a CCJ, these should be fully paid. We will need to see a certificate of debt showing this. 6 7 Woods House, SW1

5 What will it cost me at first? The main costs involved are: Holding/administration fee When you come to view our properties you will be able to pay a holding/ administration fee of 350 on the property of your choice. If we can t offer you your choice of property, we will send your cheque back to you. If you accept an offer from us and then do not complete your purchase, we will keep this fee to cover our legal and administrative costs. Survey and valuation report Your mortgage lender will want to make sure that the property you are buying is in reasonable condition and worth the money that we are asking you to pay. So they will want to carry out a survey on the property before you buy. If it is a new property, a mortgage valuation will generally be enough. If you are buying a second-hand shared-ownership property, a more in-depth survey will be needed, usually a HomeBuyer s Report Valuation. You should allow for 250 to 550 plus VAT depending on the property you are buying and the type of survey you decide to have. Legal Fees You will also need a solicitor to act for you, and some solicitors charge more than others. However, as a general guide, you should allow around 500 to 800 for solicitors fees. Stamp Duty and disbursements All properties over a certain value have to have Stamp Duty paid on them. Your solicitor will tell you what the rate is, and how you should pay it. Deposit and exchange of contracts When you exchange contracts on your new home, we will ask you to pay a 10% deposit. This will be added to the holding/administration fee you have already paid. When you complete your purchase, we will take out of the money you have paid us: any rent and service charge due for the time between completion and the end of the month, and one full month s rent and service charge in advance Any money that is left will be deducted from the purchase price. You must exchange contracts within 28 days of our formal offer of a property. You should have savings of at least 10,000 to meet the costs given above. This could be more, depending on where the home is that you are wanting to buy. You may be able to pay a smaller deposit, depending on your circumstances. Bromyard House, W3 8 9

6 Can I buy a bigger share in my home? Most leases will say that you may buy a bigger share (more equity) in your home if you want, until you eventually own it outright. This is called staircasing. You do not have to buy more shares, it s up to you to decide what s right for you. However, some leases only allow you to buy up to a set amount of equity in your home. You have to buy at least a 10% share in your home (Please see your lease for details of any restrictions which may apply.) As you only pay rent on the part you do not own, it means the more equity you own, the less rent you pay. And if you buy your home outright in the future, you won t pay any rent. If the property you buy is a house, you will usually be given the freehold if you buy it outright. This means you don t need to worry about your lease running out one day. If you decide to buy more equity, the cost will be based on the value of your home at that time. We will use an independent valuer approved by the Royal Institution of Chartered Surveyors. You will have to pay for this valuation. You may use your own valuer instead, but they must be approved by the Royal Institution of Chartered Surveyors

7 What happens if I want to sell? Just like any other home owner, you may sell your home whenever you want. To make your home available to other people who can t afford to buy outright, we will, for a short time, have the right to find a buyer for your home. We charge a fee for this service. Your lease will say how long we have this right for. If we are unable to find a buyer within this time, you are free to make your own arrangements to sell your home. If you decide to sell, we will ask an independent valuer, approved by the Royal Institution of Chartered Surveyors, to value your home. Or, you may want to use your own valuer. If so, they have to be approved by the Royal Institution of Chartered Surveyors. The price you sell your share for will be based on this valuation. You will have to pay for the valuation. If you bought your home through a government-sponsored key worker scheme, certain conditions may apply when you sell your home. Please ask our sales team for more details. Before your property can go up for sale, you will need an Energy Performance Certificate. Please see our How to Sell your Shared Ownership Home guide for more details. You will find this on our website Orchard Grove, BR6

8 What do I do if I want to buy a property? Financial interview We do this when you first view the property, or within 7 days. The interview is with an independent financial adviser and is to make sure you can afford the property, and to work out the maximum share that you will be able to buy. You will also need to show us proof of your savings, employment and earnings, as well as some personal information such as your National Insurance number and passport details. It s easy, with just a few things you need to do... 1 For homes in London, first register with or call them on For homes outside London, please register with your nearest HomeBuy Agent. To find the agent for your area please visit If your registration is successful, they will give you a reference number. 2 Contact our sales team to arrange a viewing: Call (free-phone, with voic at busy times, after office hours and during weekends) newhomes@a2dominion.co.uk 3 We will take your details, tell you whether you can apply, and then let you know when viewings or presentations are taking place. Reserving the property For newly-built properties, we will need you to pay a reservation deposit. We will take this off the cost of the share you buy once the purchase is completed. If the purchase does not complete, you will not get the deposit back as this will go towards covering administration costs. If you are buying a share from an existing New Build HomeBuy owner (the vendor), you should confirm your intention to purchase with both us and the vendor. Arrange a mortgage You must arrange for a New Build HomeBuy mortgage from a provider of your choice. Find a solicitor Once your mortgage is being processed, you need to find a solicitor and ask them to act on your behalf in the purchase. We have a list of solicitors who will be familiar with New Build HomeBuy and who may be able to act on your behalf. We suggest that you phone them first to discuss charges before deciding which solicitor you want to use. Mortgage offer Once you receive your mortgage offer, you should send us a copy for our approval before the exchange of contracts. Exchange of Contracts When we have all the information we need, we will give our consent to the purchase. Once we do this, your solicitor may be able to go ahead with the exchange of contracts. We suggest you contact your solicitor at this point to see how things stand. We would expect that the exchange of contracts will take place within 28 days of your getting the mortgage offer letter. Completion You will need to discuss the completion date with your solicitor. The completion date is the day from which you become the new owner. Phoenix, TW Emma House, RM1

9 What are the costs once I ve moved in? Mortgage and rent If you have taken out a mortgage to buy your home, there will be a monthly mortgage payment. There will also be the monthly rent you pay to us on the part you do not own. You pay this in advance by Direct Debit. Your rent will go up each year on 1 April. The amount of the increase is controlled by the Homes and Communities Agency. Repairs, maintenance and improvements As a shared owner, you are an owner-occupier, not a tenant. If you live in a house, you are responsible for all repairs to your home. Your responsibilities and ours are set out in a shared-ownership lease which your solicitor will explain fully before you buy. If you live in an apartment, you are responsible for all maintenance inside your home. We will maintain the outside of your apartment and you will pay for this through a service charge. If you want to make an improvement to your property, you must contact Leasehold services and ask for their permission before you start work. Leasehold management contact phone: Leasehold@a2dominion.co.uk Service charge With most properties, and always with apartments, there will also be a service charge. This covers the cost of maintaining the outside of the building and any shared areas. It may also include a payment towards a sinking fund. This is to make sure that if any major work is needed on the shared areas or to the outside of the building in the future, you will not have to find large amounts of money to pay for these. You will still have to pay the service charge even if you buy your property outright in the future. As part of the service charge there is a management charge which covers the cost of the leasehold management team. The cost of your share of the buildings insurance is also included in your service charge. This insurance does not cover your belongings and you should arrange your own contents insurance. Please ask our sales team for details if you want to organise this through A2Dominion New Homes. Check list Monthly costs: mortgage repayments rent and service charge Council Tax gas, water, electricity, phone contents insurance repairs You will be responsible for your household bills for example, your Council Tax and utility bills

10 Our selection and allocation policy How we select buyers We aim to sell to first-time buyers who are able to afford the cost of shared ownership but can t buy a suitable home on the open market. The amount you need to be earning will depend on the property you want to buy. It will also be affected by property prices, the equity for sale and in certain cases, the local council s policy. If you seem to meet our conditions you will need to have a financial interview. This will decide whether you qualify. You also need to be 18 or over to be able to get a mortgage. We may also be able to consider applications from people who have already owned their own home if: they owned a home with a partner and that relationship broke down they need to move into an area because of their job and can t afford to buy outright they are shared owners whose income has fallen and they could only stay as home owners by moving to a smaller, cheaper home they are shared owners whose family has grown but who still can t afford to buy outright they are living in unsatisfactory rented accommodation or able to prove their housing needs We will always give priority to people who will leave behind an empty council or housing association rented home, and to key workers (as defined by the local council or the government in areas where we operate)

11 How we decide who to offer homes to We will make offers of homes using the following priority order, unless the local council s policy says differently: council and housing association tenants who, by buying, would leave behind an empty rented home and who live in the borough where the scheme is or have a local connection key workers (as defined by the government or the local council in the areas where we operate) applicants registered on a council housing register (waiting list) applicants registered with Housing Options or local HomeBuy Agent tenants in short-term housing managed by a council or housing association who are: - people living in tied accommodation from which they have to move - people having to move to an area for work reasons - people with a proven housing need (overcrowding, poor housing conditions, split families, medical reasons, harassment and so on) In deciding how homes will be offered, we will take into account the applicants: preferences income household size. We will offer a home with up to one bedroom more than their current needs. We may ask for proof of a Residence Order Our offer of a home depends on the applicant giving us accurate information. We may withdraw any offer if information is found to be misleading or incorrect. If there is a dispute, we would use our complaints procedure. Please let us know if you would like to see a copy of this. The Data Protection Act 1998 gives you the right to see any information we hold about you on our computer system. Please let us know if you would like to see a copy of our allocation policy. people renting in the private sector, or living with family or friends, and who live in the borough where the scheme is council, housing association or co-operative tenants who, by buying, would leave behind an empty rented home, but who live outside the borough people working in the borough where they want to buy a home 20 21

12 Our equal opportunities policy We are committed to equal opportunities. We expect everyone who works for us to support us in this. This is what we will do: Treat all people equally, whatever their race, colour, ethnic origin, religion, sex, age, sexuality, physical or mental disability, state of health, appearance, marital status or family circumstances. Help ethnic groups who are disadvantaged in housing and employment by encouraging members of these groups to apply for jobs and homes. Keep a record of the ethnic origin, sex and disability of everyone who applies to us for a home or job. Keep in mind our commitment to equal opportunities when we decide who serves on our committees. Make sure everyone we work with, or who works for us, knows about our policy and keeps to it. If any of these people have their own policy, we will make sure it fits in with ours. How do I apply? Please see page 14 and follow the advice there. The demand for shared-ownership homes is often more than the number of properties we have. So it is possible that we may not be able to help you even if you qualify. However, we will always tell you what the situation is. Buying a shared-ownership home can sometimes seem complicated but don t worry! We are experts and we ll give you all the help you need. This can include filling in the forms, and putting you in touch with solicitors and independent financial advisers who can help you find the right mortgage. If you have any questions, please phone the Sales Team on: (freephone answerphone service) There is voic service out of hours and during busy times. You can also newhomes@a2dominion.co.uk or visit We re here to help. Take equal opportunities into account when we update our housing and employment policies and procedures, by regular monitoring at our schemes. Images shown in the brochure are a guide only. Details correct at time of going to print. April

13 A2Dominion New Homes 15th Floor Capital House 25 Chapel Street London NW1 5WX Phone: Home Ownership Team freephone answerphone service All other enquires to Customer Services Centre: Open: 8am to 8pm Mon to Fri 9am to midday on Sat Fax: A2Dominion New Homes is a trading name of the A2Dominion Housing Group Ltd (I&P Soc. No R, TSA Reg. L4240) and its legal subsidiaries. For the full list visit Registered Office: Capital House, 25 Chapel Street, London NW1 5WX If you would like this leaflet in another language or format please contact us: AAA Czesc SAWABONA translate@a2dominion.co.uk