Buying your home. Is this clear?

Transcription

1 Is this clear? Do you or someone you know have any difficulty reading this booklet? All our information is available in large print, Braille, on audio cassette or CD, or translated into the language of your choice - please call (Minicom ) or info@teignhousing.co.uk to request a copy. Buying your home Templar House, Collett Way, Newton Abbot, TQ12 4PH Customer Services: Registered Charity Number:

2 Buying your home We have developed this booklet as a guide for anyone interested in buying their home. As well as giving you advice on what to do, we also outline some of the likely costs associated with owning your home. If you are not sure whether you will be able to buy your home, or if you have any questions, please contact our Customer Services Team on or info@teignhousing.co.uk Can I buy my home? You have to be a named tenant to purchase your home and you must occupy it as your main or principle home. Other close family members, your spouse, civil partner or partner may also be able to buy the home with you. If you were an assured or a secure tenant of Teignbridge District Council before 4th February 2004 you are likely to have the preserved right to buy your home. This means that if you decide that you would like to buy your home, we will normally sell it to you, as long as certain criteria have been met. If you became a tenant of Teign Housing after 4th February 2004 you may have the right to acquire your home. This means that you may be able to buy your home, depending on certain criteria, including how long you have lived in your home, how long you have been a public sector tenant and whether or not you live in a designated rural area. How long must I have lived in my home before I can apply to buy? If you were an assured or a secure tenant of Teignbridge District Council before 4th February 2004 you have already lived in your 1

3 home for long enough to qualify for the preserved right to buy. If you moved into your home after 4th February 2004 but before 18th January 2005, you must have been a tenant of Teign Housing (or have been a tenant of another housing association or council) for two years to qualify for the right to acquire. If you moved into your home after 18th January 2005, you must have been a tenant of Teign Housing (or have been a tenant of another housing association or council) for five years to qualify for the right to acquire. Are there any reasons why I might not be able to buy my home? You will not be able to buy your home if: You have a bankruptcy order against you; Teign Housing has obtained a possession order requiring you to give up your home; Teign Housing intends to demolish your home and has served on you an Initial or Final Demolition Notice; Your tenancy has been demoted due to an anti-social behaviour order; Your tenancy is an assured shorthold tenancy, licence or other non-qualifying tenancy; In the case of the right to acquire, your home is in a designated rural area or built with public funding after 1996; Your home is on a sheltered housing site or is otherwise particularly suitable for use by the elderly; Your home is on a site designated for people with physical or mental disabilities. There are some other less common reasons why you may not be able to buy your home or why you may be exempt from some of the rules on page 2. When we receive an application from you to buy your home, we will check your details against all the rules and then inform you in writing of whether you have the right to buy or the right to acquire your home. How do I apply to buy my home? If you want to buy your home, you should write to Teign Housing, Templar House, Collett Way, Newton Abbot, TQ12 4PH, info@teignhousing.co.uk or call We will send you further information and an application pack. If you would like to discuss your application or require any further information, please let us know. Application forms and information booklets can also be obtained from the Office of the Deputy Prime Minister Enquiry Helpdesk on: How much will I have to pay? The value of your home is based on the price you would be expected to pay on the open market with the following assumptions: If you have carried out improvements to the property which have increased its market value, these will be taken out of the price you will pay; It is assumed that your home will be sold with vacant possession and not subject to your tenancy. This means you will own the property and the assured tenancy will be cancelled; It is assumed that you have looked after the property to a reasonable standard under the terms of your tenancy, maintaining its value. Teign Housing cannot sell you your property for less than it has paid to buy, refurbish and maintain it. 2 Customer Services:

4 Will I be entitled to any discount on the value? If you have the preserved right to buy, you are entitled to a discount on the market value of your home. This discount will depend on how long you have been a public sector tenant. In the South West the maximum amount of discount has been capped at 30,000 by the Government. If you have the right to acquire, you are entitled to a fixed discount, which is currently 10,000. Again, this figure has been set for the South West by the Government. What happens next? Teign Housing will organise for a valuation to be carried out. We will then work out your discount and send you an offer letter setting out the amount you can purchase your home for. We will also give you the terms of sale and a plan of the area we will sell to you. The letter will contain an estimate of the charges we may make in the future for service charges and maintenance. In the case of flats, we will give you a list of the service and maintenance charges you will be expected to pay along with the cost of any decorations or major works which are planned. What costs will I have to pay to buy my home? Teign Housing makes no charge for dealing with your application and you should not incur any costs until you actually decide to buy your home. The typical costs you will need to pay if you decide to buy your home include: Legal fees to your solicitor in dealing with the purchase; Usually, but not always, a mortgage arrangement fee to the bank, building society or other lender for providing a mortgage; The costs of the valuation which the lender will arrange to check that the house is worth what you are paying; The cost of any survey or valuation you may wish to arrange yourself; Stamp duty land tax this is currently payable at 1% of the full purchase price for all properties over 120,000. For example, you will have to pay 1,250 if the price you pay for you home is 125,000; Administration charges some companies specialise in helping tenants through the right to buy process and may charge fees for supplying application forms and helping you to complete them. As the right to buy process is free to the home buyer and controlled by Government legislation, Teign Housing can provide all the forms you need and any advice for free; Some companies may offer to arrange your mortgage, surveyors and solicitors for you and their fees may be added to your final mortgage. This is perfectly legal and is often a way to make the purchase costs more affordable, but it does mean that you will pay back much more in the long run as interest will be added for the length of your mortgage. Most tenants have no difficulty in buying their home by seeking advice direct from Teign Housing and other organisations such as the Citizens Advice Bureau, a local solicitor, a local bank or building society or financial advisor. By doing so, you could avoid any excessive or unnecessary costs that may be charged by right to buy companies. It is a good idea to get advice from as many people as possible and work out all your costs before you buy. 4 Customer Services:

5 How long will it take? Both you and Teign Housing have certain obligations to respond within a set length of time at different stages of the right to buy or right to acquire process. We will give you this information when you contact us, so you know your rights and responsibilities. Will I be a freeholder or a leaseholder? When you purchase your home you will either become a freeholder or a leaseholder. Freehold properties are usually attached, semi-detached or stand alone houses and bungalows. Leasehold properties are usually flats or maisonettes. When a property is sold with a freehold it generally means that the home and the land that it has been built on are sold together and the purchaser will have total responsibility for the maintenance and upkeep of both. When a property is initially sold on a leasehold basis, the purchaser buys a long lease, usually for 125 years. This gives the owner of the lease, or their successors, the right to live in that property for the duration of the term, which will decrease year on year. Teign Housing will continue to own the external structure of the building and the communal features as well as the land that the home or block of flats has been built on. We will charge you an annual service charge and ground rent for the upkeep of the building and its communal features. Costs for major works will also be charged to you. In addition to this, the leaseholder will also be responsible for the maintenance and upkeep of all the internal features of their home. At the end of the 125 year lease, the property will be returned to Teign Housing, although there are usually situations where the lease can be renewed or extended. What does it mean to be a home owner? Monthly mortgage payments are not the only costs you will pay as a homeowner. Careful consideration should also be given to the likely costs. Mortgage payments remember interest rates can go up over the life of the mortgage; Mortgage payment protection insurance to cover the risk of losing a job, suffering illness or other major problem; Life insurance to cover the risk of death of one of the persons paying the mortgage; Council tax; Water, sewerage, gas, electricity and other utility services; Buildings insurance; Repairs and maintenance, including gas servicing. You will be required to keep your home in good repair. Consider the costs that you may have to pay for example, to pay a plumber to unblock a waste pipe costs around 50; Service charges, for things like grounds maintenance, shared pathways, sewers etc. This is a monthly payment made in advance; Sinking fund payments. Leaseholders must pay an additional amount to help cover potential future maintenance costs. These will be based on anticipated costs for things like external decoration, new roofs etc. You should be aware that actual costs, or unanticipated work, may require additional payments to be made at the time of any work. 6 Customer Services:

6 You should also remember: If you currently claim benefits, buying your home may affect the amount that is paid to you; You are at risk of losing your home through repossession and will become homeless if you do not keep up repayments on your mortgage; House prices can go down as well as up. What happens if I sell my home? You can sell your home at any time. If you do decide to sell your home, you must contact Teign Housing first as we may want to buy it back from you. If you transfer or sell the property deeds within the first five years you will usually have to repay some, or all, the discount you received. The amount you repay will be calculated on the percentage of discount you received when you bought your home, but applied to the value at the time of selling. This means that if house prices go up, the amount of money you repay may be more than the amount of money you originally received in discount. Sell in Year 1 Year 2 Year 3 Year 4 Year 5 Repay all the discount 4/5 discount 3/5 discount 2/5 discount 1/5 discount For example, if you bought a property for 100,000 and received the full 30% discount, your discount is 30,000. If you then decide to sell your home a year and a half later and it is valued at 150,000, you will have to pay back 36,000. This is calculated as 4/5 of the 30% discount on the selling value of 150,000. Certain sales or transfers may be exempt from the repayment of the discount. Once the five year discount period has expired you are free to sell your home without a financial penalty. Deferred resale agreements Some builders, financial organisations and individuals have been known to tell tenants that they will help them buy their home if the tenant allows them to buy their house when the five year discount repayment period has run out. This is called a deferred resale agreement. New rules and legislation now mean that under a deferred resale agreement the entire discount must be repaid regardless of whether arrangement is made during or after the five years discount period has passed. 8 Customer Services: