Right to Buy. Owning your own home is closer than you think! from Paradigm

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1 Tenants Right to Buy SCHEME Owning your own home is closer than you think! from Paradigm

2 Tenants Right to Buy SCHEME There has never been a better time to consider buying your own home. With Tenants Right to Buy, it s closer than you think! Your home is the largest purchase you ll ever make, so it s not a decision to be taken lightly. Once you ve made your mind up, we ll help and guide you at every stage of the buying process. This booklet is designed to guide you through the process of buying your home from Paradigm Housing. It includes details of the actual scheme, along with easy to read sections that will hopefully answer many of the questions you are thinking of. Also, separately in the pack is the Tenants Right to Buy application form and a useful jargon buster to explain many of the words and phrases often used when purchasing a property. Do read this booklet carefully as it contains important information that you should take on board prior to proceeding. When you are happy to continue, please complete the application form in full making sure you have a copy for yourself, and return it to us in the reply paid envelope provided. When we receive your completed form we ll process your application and contact you shortly afterwards. You will have a maximum of eight months to complete on the purchase of your home; before applying, you must make sure you will be in a position to complete in that time. Planning for the years ahead: It is really important that you give careful thought to the costs and responsibilities of buying your own home. You will need to do some calculations to help you decide how much you can afford to spend on buying and running your home. We also recommend taking independent financial advice before completing and returning the application form. Do remember that, at any point, you can ring us to ask questions about the buying steps. We re just a call away. We look forward to hearing from you. The Paradigm Tenants Right to Buy Team How the scheme works The Tenants Right to Buy Scheme is Paradigm s tenants purchase scheme. Who qualifies? The scheme gives you the opportunity to buy the home you currently rent subject to you meeting the following points: You must have had a public sector tenancy for two years if your continuous tenancy started before 18 January 2005 or for five years if your tenancy started on or after 18 January 2005 You must occupy the property as your only or principal home You must have a clear rent account at the time of completing on your purchase. Who can purchase the property you live in? You can jointly purchase the property with up to three members of your family (e.g. son, daughter, partner). These people must have lived with you for 12 months before the application. A maximum of four people may purchase (including the tenant or joint tenants). Discounts that you could be eligible for To help you purchase the property, you will qualify for a substantial discount which is mainly dependent upon where you live. This discount is the same as those set by the Government to encourage tenants to purchase the property that they live in. Please note that if you have previously been given a discount to buy a home, this will be taken off your Tenants Right to Buy discount. You will be advised of your qualifying discount when you make contact with us. Scheme exclusions If your circumstances are any or all of the following, unfortunately you will not be able to buy the property you live in: You occupy your home on a licence, a shorthold tenancy or a long lease You are an undischarged bankrupt, or if you have a bankruptcy petition pending against you You are subject to a formal creditor s agreement made under the Insolvency Acts You are required to vacate your property as a result of a court order seeking possession, or if you are subject to a Notice of Seeking Possession (NOSP). Your home will not qualify if it meets any or all of the following: It is a home provided specifically for and with special facilities for people with disabilities, people suffering from a mental disorder, people who have special needs, or persons of pensionable age It is the subject of a demolition order. In addition, if you move before completion of the purchase we will withdraw our offer of sale. 2 3

3 How the scheme works How much will your home cost to buy? Property prices vary according to area and the size and type of the property. To find out how much the property is worth on the open market, we will arrange for an independent surveyor to visit. Any improvements you have carried out will not be included in the valuation. Until then, we will not be able to give you an accurate figure of how much you will have to pay. In the meantime, if you want a guide price, the best way to find out how much homes are selling for in your area is to look at the property pages in the local paper or visit a property website. For example: Getting a mortgage for your home Unless you can purchase your property outright with savings, you ll need to secure a mortgage to pay for your new home. It s likely that you will need to use savings for a deposit, the percentage of which will vary from mortgage provider to mortgage provider. The more you can put towards the cost, the lower your monthly repayments. Mortgages can normally be arranged through a Building Society, Bank or similar lending organisation. They will be happy to advise you on the most suitable type of mortgage for your particular circumstances. There are many different types of mortgages available and it is important to shop around before making your decision. Alternatively, you might find it easier to ask an independent mortgage adviser to find the best deal for you. They work with many mortgage providers and can do a lot of the legwork in finding the right financial package for you. Other purchase related costs that you need to take into account To buy your home, there are a number of initial costs which you will have to pay for, so you will need to have some funds available before you start. Initial costs include: Mortgage Valuation or Survey Report Your mortgage lender will normally need to a have a valuation done so they can be sure the property is worth the value we have put on it. It is advisable to ask for a homebuyer s report as well as the valuation. A homebuyer s report is designed to reassure you that you are paying a fair price for the property. It informs you about any serious defects within the property. Guide cost - around 500. Mortgage Arrangement Fee Your mortgage lender may also charge you a fee for arranging the mortgage. Ask how much this will be before you commit yourself to a particular lender. Guide cost - around Legal Fees and Disbursements To buy a property you need to instruct a solicitor to act on your behalf. The solicitor will check the Transfer or Lease on the property and explain the terms to you. They will also make the necessary local checks (searches) to make sure nothing is going to be built near to the property which may affect your enjoyment or the future value of your home. Make sure you find a solicitor who has experience of Right to Buy schemes as it will make the process run more smoothly and may save you money. Solicitors fees do vary, so again it is worth getting several quotes, and make sure to get a firm quote from the one you choose before you proceed. Guide cost - around Stamp Duty Stamp duty is a fee payable to the government for properties valued at a certain level and above. Your solicitor will be able to advise you if stamp duty is applicable to you and how this should be paid. Apportionments If you live in a flat, advance payments of any service charges and buildings insurance will be payable through your solicitor on completion of your purchase. These are called apportionments. We will also ask you to pay any outstanding rent or sundry debt owed to Paradigm. Understanding other costs you have to pay whilst buying the property Until the purchase of the property is completed, you must continue to pay your rent while your application is being processed and the buying process for your home (also known as conveyancing) is being dealt with by the solicitors. You must have a clear rent account at the time of completion otherwise any outstanding rent or sundry debt will be added to the cost of your home. The costs of running your own home When you are a homeowner, you will need to budget carefully for your mortgage repayments and general living expenses, as well as making allowances for unforeseen extras and emergencies. You will now be responsible for your household bills including Council Tax, buildings and contents insurance, and for all repairs and decorations. Certain costs may be covered in your annual service charge if you are buying a flat. If you don t realise the costs involved in keeping a home repaired and maintained, how about asking a friend who owns their own home for an idea of the costs that can be involved. If you have been paying for services like water, gas and electricity inclusive with your rent, you will now have to pay for these separately once you stop paying rent. If you obtain a mortgage to pay for the property you will pay a monthly repayment to your mortgage lender. This is likely to include payments for mortgage protection insurance, which will typically cover you when you are unable to pay your monthly repayment e.g. if you are unwell. Selling your property in the future You may sell your property whenever you like, in just the same way as other homeowners. However, if you sell within five years from the date of purchase you will have to repay an amount representing the value of the Tenants Right to Buy discount that you received. This amount would be calculated as a percentage of the sale price (being equivalent to the percentage of the original valuation represented by the discount). An example below illustrates how the calculation works: Example: if the value of your home was 100,000 when you purchased it and you had a discount of 10,000 so that you paid 90,000, the discount would represent 10% of the value; so the amount repayable would be 10% of the sale price when you sell during the first year after the purchase date, reducing each year as detailed below. Year of value of purchase Discount repayable 1 100% 2 80% 3 60% 4 40% 5 20% If you want to sell at any time during the first ten years from the date of purchase, you will have to offer the property back to Paradigm to buy at the current market value this is known as the Right of First Refusal. If we decide not to purchase the property you will be free to sell it on the open market. 4 5

4 6 steps to Home Ownership 1 2 Complete your application form On receipt of your application form we will check to make sure you are eligible and that the property you live in qualifies for Tenants Right to Buy. (We will write to you if we are not able to proceed with your application). Acceptance You are approved and ready to move to the next stage of the process. We will send you a letter confirming your acceptance on to the scheme. We will notify you that Paradigm will now be responsible only for emergency repairs to the structure of the building and for the supply of essential services; any planned improvement works will be cancelled. 3 Valuing the property 5 4 We will arrange for an independent surveyor to contact you and arrange to value your home at the current open market value. Any improvements you have carried out that have added value to your home will not be included within the valuation. Your formal offer for the property Once we have the valuation, and have gathered other essential information about the property, we will prepare a formal offer which will tell you the valuation, the discount and the sale price. The formal offer will also include any service charges you may have to pay in the future and/or any information we know about structural defects related to the property. Within the information pack will be a list of approved mortgage lenders that we would want you to select from. We will endeavour to bring the offer to you in person to ensure you fully understand all of the information provided. However, we may post it to you and go through the documents with you over the phone. Please note that the valuation we give to you will be final and not subject to negotiation. 6 Make the big decision You now have up to eight weeks to let us know that you want to go ahead with the purchase. The quicker you let us know, the quicker you will become a homeowner! During this time, you should meet with your mortgage advisor and/or independent financial advisor to arrange your mortgage. They will provide you with a mortgage offer which we will need to see a full copy of when you contact us. You will also need to appoint a solicitor and give us their full contact details. The buying and legal processes start We will look at your mortgage offer to make sure it is from an approved lender from the list we included with the formal offer, and that the amount of the loan is for no more than the sale price of the property. Next, we will instruct our solicitors who will contact your solicitor and the conveyancing can begin. Conveyancing (which is the legal work involved in buying a property) can take a number of weeks. Importantly, you must complete on the purchase of your home within eight weeks of us instructing our solicitors. And that s it! Remember that we are with you every step of the way and you can contact us if you wish to discuss any aspects of the buying process. We are here to make the purchase of your home, simple, worry-free and as quick as possible. Here s to home ownership! 6 7

5 1 Glory Park Avenue Wooburn Green High Wycombe HP10 0DF Tel: Fax: If you would like this information in a different language, or in Large Print, Braille, Audio Tape, or Face to Face, please contact us on These particulars do not constitute any part of an offer or contract. Any intended purchasers must satisfy themselves by inspection as to the correctness of each of the statements contained in these particulars. Your home is at risk if you do not keep up rent and mortgage repayments.