Take your first step onto the property ladder with our. Shared Ownership Scheme

Transcription

1 Take your first step onto the property ladder with our Do-It-Yourself Shared Ownership Scheme

2 DIYSO allows you to buy a share in a home of your choice and pay an affordable rent on the part you don t own. Do-It-Yourself Shared Ownership Do-It-Yourself Shared Ownership (DIYSO) is a part buy, part rent scheme designed to help people get on the housing ladder. It is very similar to other shared ownership schemes except for one key element. Under most shared ownership schemes the buyers usually choose a home provided by a housing association. Under DIYSO buyers can choose a home on the open market giving them far more choice of a property to buy. DIYSO allows you to buy a share in a home of your choice and pay an affordable rent on the part you don t own. You will buy your home on a lease. The lease will be granted for 125 years from completion (or if you buy a flat for the term on the existing lease for the property), but the provision for part rent, part buy will only apply for a maximum period of 25 years. You buy a share, between 35% and 75%, and pay rent on the part that you do not own. You will need to get a mortgage, or have personal savings for the share of the property you are buying. Under this scheme you are required to buy further shares in the property and either own it outright after 25 years or have sold your share and moved on. It is essential that you understand this provision and that you review over time your ability to buy further shares in the property. Any individual buying the property from you will buy under the same terms. The original 25 year period cannot be extended.

3 Who is eligible to apply? People who live or permanently work in the Royal Borough of Windsor and Maidenhead and have done so for the last six months; First time buyers; People who have lost their home as a result of a divorce; Social housing residents (people living in housing provided by a housing association). Am I eligible? Your household income should be at least 25,000 and not exceed 60,000 per annum; You must have savings of at least 10,000 for a deposit on the property you wish to buy and to cover all the costs associated with buying a property; Your income must be sufficient to cover the cost of the mortgage and rent of the property; You (or any joint applicant) must not already own a home or be on the deeds of another property; You must not have been in any rent arrears during the past 12 months (because of standard mortgage checks it is unlikely that people with a low credit rating will be able to obtain finance); You must not be able to afford to buy a home outright. How do I apply? Please fill in our application form providing the following supporting information: Proof of your identity (copy of passport, photo driving licence or birth certificate); Proof of savings; Proof of your income (payslips covering the last three months or three years accounts if you are self-employed and your latest P60); Bank statements covering the last three months; Documents showing details of any loan agreements; Credit card statements for the last three months; A copy of your rent book or rent statement for the past three months; If you are losing your home as a result of a divorce, please supply a mortgage statement for the last six months (if applicable); A reservation fee of 500. The deposit is required to demonstrate your commitment to going ahead with the DIYSO Scheme. When you buy a property the 500 deposit will be part of the purchase price. If you pull out of the scheme for whatever reason the deposit is non-refundable. However, if your application to take part in the scheme is turned down by an Independent Financial Advisor your deposit will be refunded in full. Can I afford to buy? Once we have your application, with all the supporting information, an Independent Financial Advisor will assess whether you can buy a home and invite you to come to an interview to make sure you can afford and fully understand all the costs of owning a home. If your application is approved we will send you an offer to take part in the scheme. The offer will set out the price guidelines of the property you can afford to choose on the open market and the share you will be expected to buy. Please note that the share percentage and the price of the property you can buy is linked to your income and is subject to a financial approval from an Independent Financial Advisor (IFA).

4 What happens next? You can now begin your search for your home. The property you choose to purchase must: 1.Be within the price guidelines set out in your offer letter; 2. Be within the Royal Borough of Windsor and Maidenhead; 3.Not be a listed building; 4. Be in good mortgagable condition; 5. Not have attracted any previous shared ownership grant funding. Once you have found a property you would like to buy under the DIYSO please contact us. Subject to the property meeting the terms and conditions of the scheme, we will then negotiate the purchase of the property. Once we have agreed the price the property will undergo a full structural survey carried out by an independent surveyor. The purchase of the property will be subject to a satisfactory survey. Once the purchase of the property has been agreed and we have a satisfactory survey, we will send you a formal offer to buy an agreed percentage of the property you have chosen. You will have seven days to accept this formal offer. Appointing a solicitor Getting a mortgage Exchange of contracts Moving in to your new home Your responsibilities and on-going costs Once you have accepted the offer you will need to appoint a solicitor. It is important that you choose a solicitor who is experienced in shared ownership. We can provide you with details of solicitors experienced in dealing with shared ownership. You should call all of these solicitors to find out how much their fees are, including the cost of local searches, stamp duty and other costs associated with buying a property before you agree to use any of them. As soon as you have accepted our offer you will need to complete a full mortgage application. Once you have received a copy of your mortgage offer, you should send this to us immediately. Once your solicitor and ours have received all the documents they need, we can exchange contracts. This means that you sign a legally binding agreement to buy the property and we sign a contract to sell it. When we exchange contracts we will ask you to pay a further deposit of 10 per cent towards the value of the share you are buying. On the day of exchange of contracts your solicitor will agree the date that you will complete the purchase. This is normally one or two weeks after the exchange of contracts. Your purchase is completed. Congratulations this is the day that you can move into your new home. We will arrange to meet you at the property to hand over the keys and check all the meters. Mortgage repayments Your monthly mortgage repayments will depend on the size of your mortgage and interest rates. We can put you in touch with a list of financial advisers who specialise in shared ownership mortgages to explain the different types of mortgages available and to work out which mortgage will best suit your needs. Increases in rent You will pay rent on the share of the property you do not own. The rent is charged at 2.75% of unsold equity. Rents will increase each year by the Retail Price Index (measured at the end of September) plus 0.5 per cent. Rents will only be adjusted upwards. There will be no downward adjustment in rents if the RPI drops below 0 per cent.

5 Service charges You will be responsible for the upkeep of your property, both inside and outside. You may be required to pay a monthly service charge for the upkeep of any communal areas. The services and the charges covered will vary according to the home you choose, but may include cleaning, lighting, and the maintenance of shared gardens or parking areas. Before you move into your new home details of the service charge payable will be explained to you. Repairs Although initially the property is not owned outright by you, you will have all the normal responsibilities of a full owner. This means for example that you will be obliged to pay 100% of the outgoings relating to the property and you will have full responsibility for repairing and maintaining your property in the same way as if you owned the property outright. Utility bills You are responsible for paying your utility bills and council tax from the date the property becomes yours. As near after completion as possible, you will need to take gas, water and electricity meter readings and provide these to your suppliers. Staircasing - Buying more shares in your home As mentioned previously under this scheme you are required to have bought the property outright by the end of 25 years, or have sold your share and moved on. If you are still living in the property as a shared owner at the end of 25 years you will be charged interest at 4% above the Barclays base rate on the share of the property you do not own, until such time as you have either fully staircased or sold. This is in addition to rent. When you increase your share in the property you must buy a minimum of 10 per cent each time. As you buy further shares the rent will be reduced proportionately to reflect the fact that our share in the property has reduced. The value of any additional shares you buy is based on the market value of the property at the time. When you have staircased to 100% the lease agreement between us will no longer exist and we will transfer the freehold title to you, (unless you have bought a flat then you will remain a leaseholder). Making changes to the property You must get written confirmation from our Home Ownership Team before you carry out any work. You may also need to get approval from your mortgage lender, as well as any legal/planning permission you need. What if I decide to sell? We will help sell your share via our database of first time buyers. We have an exclusive option on the sale of the property, and will seek to find a buyer within six weeks of the property coming onto the market. After the six week period, if the property remains unsold, you will be free to sell your share of the property on the open market. If you do not keep up your rent and mortgage repayments, your home could be at risk.

6 If you would like an audio or large print version of this document please call our offices on Urdu Hindi Gujarati Punjabi Crown Square, Waldeck Road, Maidenhead, Berkshire, SL6 8BY. tel: / fax: Minicom: contact@housingsolutions.co.uk