Helping people with a disability buy a home of their own - a guide for families and professionals.

Transcription

1 Helping people with a disability buy a home of their own - a guide for families and professionals.

2 Contents From hopes to homes 3 Home Ownership Who Benefits? 4 Home Ownership Key Considerations 5 Shared Ownership An Overview 6 The Three Types of Shared Ownership 7-8 Shared Ownership How It Works 9 Obtaining a Mortgage 10 Home Purchase Fees 11 The MySafeHome Solution The Risks 14 The Role of the Housing Association 15 The Role of the Solicitor 16 How to Apply Your Notes 19 This brochure has been designed to provide information for disabled people, parents, carers and other professionals involved in providing housing or care and support for disabled people. When we use the term disabled this includes people with learning disabilities, enduring mental health issues, physical disabilities and people with sensory impairments. 2 Helping people with a disability buy a home of their own - a guide for families and professionals.

3 From hopes to homes Until recently home ownership has just been a dream for many disabled people. But, by working hard with leading professionals across the disability sector and revolutionising the shared ownership model, we began turning hopes into homes back in Since then we ve helped hundreds of people buy a home of their own. With seismic shifts in government policy now supporting the rights of the disabled to take control of every aspect of their own lives from care to accommodation home ownership is increasingly set to become the first choice option for many more. This guide highlights the benefits of home ownership for Buyers, Lenders, Housing Associations, Local Authorities and Care Providers and takes you through our unique process The MySafeHome Solution that makes it all happen. We ve already been privileged to help change hundreds of lives but we recognise that this is just the beginning. Together we ll make home ownership a reality for thousands more. David Abbey Managing Director Helping people with a disability buy a home of their own - a guide for families and professionals. 3

4 Home Ownership Who Benefits? The list of people who could benefit from owning a home of their own is as diverse as the backgrounds and disabilities of those we ve already helped. They include: Residents of care homes who would like to live more independently. Those who currently live with parents or other relatives who would like a home of their own, whilst remaining close to their family and friends. Younger adults looking to leave home or residential care for the first time. Anyone living with older carers who are anxious about what will happen to this person when they re unable to provide the necessary support. Individuals who already have self directed support but need the accommodation to match. People who are currently living away from their local area and wish to move closer to family and friends once more. Whoever the potential buyer may be we ll provide the practical help and support that they need to purchase a home of their own, arranging the mortgage funding through a unique process known as The MySafeHome Solution. From following up the initiation of the benefits that could cover all of the mortgage interest repayments (making ownership free to the buyer) through to checking that these are maintained, this process guarantees peace of mind for years to come. As a homeowner the benefits are clear. On top of long-term security and a place of your own, there s the chance to lead your life, your way. But home ownership benefits a wider group too: If you re a Housing Association you ll find buyers with 100% mortgages from an untapped market for your New Build HomeBuy properties, whilst also meeting some of the criteria within the disability equalities scheme. If you re a Care Provider you ll develop stronger long-term relationships with your clients by offering a better choice of housing, proving you have their best interests at heart and potentially winning business from a wider group of people across the full range of tenure. To stay ahead of the personalisation agenda you ll have to cater for a wider range of people too, including those with mental health issues, the elderly and physically disabled. We ll help you access these groups. If you re a Local Authority or Primary Care Trust you ll be meeting the Valuing People Now agenda and targets (for the six groups covered in the Who Benefits section), demonstrating that you re doing the best for your community and, in some cases, making actual cost savings as homeowners conditions may dramatically improve in their new, more stable environment. 4 Helping people with a disability buy a home of their own - a guide for families and professionals.

5 Home Ownership Key Considerations We re not saying that home ownership is right for everyone, but that everyone should have the right to own their own home. In short it s about taking home ownership out of the disabled world and putting it right where it belongs in the real world. That s why it s just as crucial to weigh up the real pros and cons too. It s vitally important that the buyer and their families, as well as the professionals involved in their care, consider the full range of housing and support options open to them. If independent living is chosen as the best way forward (and we re confident that it is in many cases) finding the right property is the first challenge. Location and property type are often vitally important. Here are some of the key factors that may need to be considered: A safe and familiar area. Close proximity to family and friends. Within easy reach of a day centre or other appropriate activities. On the right side of the street for accessing shops without having to cross busy main roads. If there s a physical disability a bungalow or ground floor flat might be the best option. In cases where an individual s behaviour may create noise a detached property may be most appropriate. Those with autism may be more sensitive to the noise and bustle of a busy city centre, so a quieter location might be more suitable. If an assistive dog or other pet would be beneficial a garden may be required, conversely some buyers might prefer a maintenance-free outside space. Of course getting the right type and size of property in the perfect location from the public sector can be really tricky, if not impossible. That s why we give people the opportunity to buy from the open market too, through a scheme known as Home Ownership for People with Long-term Disabilities or H.O.L.D for short. We ll explain a little more about this later on. Helping people with a disability buy a home of their own - a guide for families and professionals. 5

6 Shared Ownership - Overview Contrary to what it sounds like Shared Ownership doesn t mean that the homeowner will be physically sharing their property with anyone else (although some do choose to). Established back in the 1980 s a time of soaring house prices it gave people who would otherwise be excluded from home ownership the chance to buy a share of a property. Typically most schemes are offered through Housing Associations with the property being within one of their existing developments or obtained on the open market. The homeowner buys a share of the property anything from 25% to 75% and pays rent on the remainder. So, Shared Ownership is a viable, tried and tested option. But what are the advantages and disadvantages? The Main Advantages of Shared Ownership Greater independence, control and choice in terms of where you live. Long-term security like any other homeowner you can choose how long you live in your home, this could be for the rest of your life. It can cost less than full ownership. You don t need a deposit. Depending on the lease the Housing Association may be responsible for repair and maintenance always check that they re able to provide this service. Family money can sometimes be used to help buy the property. The Main Disadvantages of Shared Ownership Shared ownership isn t available in all areas of the country. There are some initial costs involved in buying the property including survey, mortgage arrangement, lender costs and solicitor s fees these are currently around 3,000 (Jan 2009). Depending on the lease the homeowner may be responsible for repairs and maintenance for the property. 6 Shared Ownership - A Guide for Families and Professionals Supporting People

7 The Three Types of Shared Ownership One General Needs Shared Ownership This is commonly called New Build HomeBuy and it s funded by the Government through Housing Associations. Key Features: These are normally newly built properties that disabled people may apply for alongside other any other applicant. The Government provides some of the finance to the Housing Association which helps to keep rents down. These schemes are usually aimed at young working people on modest incomes. Housing Associations wouldn t normally market them to disabled people who aren t working, unless the opportunity and need was bought to their attention. The main disadvantage is that most of these properties place the responsibility for repairs and maintenance on the homeowner, which can be problematic if you have to rely on state benefits to make up your income. To overcome this problem the standard lease can be amended for disabled people to place the responsibility on the Housing Association. This is then covered by a service charge which is eligible for Housing Benefit. Limited repairs, improvements and adaptations can be made to these properties, but only if you engage with the Housing Association very early in the building phase. Shared Ownership - A Guide for Families and Professionals Supporting People 7

8 Two Shared Ownership for Disabled People This is commonly known as H.O.L.D Home Ownership for people with Long-term Disabilities. Again it s funded by the Government through Housing Associations. The key difference here though is that the buyer is able to choose a property from the open market, just like everyone else. Key features: The Government provides some of the finance to the Housing Association which helps to keep rents down. The schemes always have a suitable lease for disabled people, ensuring that the Housing Association s responsible for repairs and maintenance. Again this is then covered by a service charge which is eligible for Housing Benefit. The main disadvantage of the H.O.L.D scheme is that relatively few Housing Associations have applied for funding from the Government. So it s not currently available in all areas of the country. Three - Shared Ownership using Family or Trust Fund Commonly known as Family Funded Shared Ownership, this is funded by parents, a Trust Fund or other sources related to the buyer. Key features: The money s given to the Housing Association in the form of a loan, replacing the funding that would normally come from the Government. This loan is covered by an agreement where: No interest is paid to the lender. The loan is used by the Housing Association to purchase its share of the property not the homeowner s share. The loan is repaid upon the sale of the property together with the corresponding share of the property valuation growth. The funding from the family or Trust Fund helps to keep the rent as low as possible. The schemes always have a suitable lease for disabled people, ensuring that the Housing Association s responsible for repairs and maintenance. Again this is then covered by a service charge which is eligible for Housing Benefit. The main advantage of this scheme is that it can provide housing for disabled people at far less than the full market cost. This scheme also offers the most flexibility in terms of the choice of property even in relatively expensive areas. The main disadvantage of this scheme is that a minimum investment of 30,000 is required. 8 Helping people with a disability buy a home of their own - a guide for families and professionals.

9 Shared Ownership How it Works In simple terms here s how Shared Ownership works. We ve broken down the costs into their component parts and illustrated how these can all be met with existing benefits. In other words, the MONTHLY HOUSING COST COULD BE FREE TO THE HOMEOWNER. Property Value 160,000 Shared Ownership 60% Sale 96,000 40% Rent 150 per month Service Charge Housing Association (Repairs & Maintenance) 130 per month BUY Home Purchase Fees - 3,000 approx Mortgage from Building Society 96,000 Mortgage = 450per month SMI Benefit direct to Building Society Rent = 150per month Housing Benefit direct to Housing Association Service Charge = 130per month Housing Benefit direct to Housing Association MONTHLY HOUSING COST COULD BE FREE TO HOMEOWNER Helping people with a disability buy a home of their own - a guide for families and professionals. 9

10 Obtaining a Mortgage Many disabled people have to rely on state benefits to make up their income, but this needn t prevent them from getting a mortgage. We have the unique experience and specialist knowledge required to enable them to become homeowners and offer peace of mind together with clear, sound, professional advice. In fact we only advise disabled people and their support circle. Our first homeowner moved into their property in January 1999 and we ve helped hundreds more since then. For disabled people SMI (Support for Mortgage Interest) benefit can meet some or all of the mortgage costs. This benefit will only ever help with the interest payable on the mortgage not the capital. This remains frozen until the property s eventually sold, when it s repaid to the lender. The maximum amount of mortgage on which SMI benefit can be paid is now 200,000 (Jan 2009). SMI benefit will apply as long as someone s moving to a home more suited to their needs as a disabled person. They must also have been in receipt of DLA (Disability Living Allowance) plus Income Support or Incapacity Benefit or SDA (Severe Disablement Allowance) for at least 13 weeks (this time period applies to all of the above benefits). Some decision makers in the Benefits Agency aren t familiar with these details and we re occasionally required to quote the relevant regulations. The rules surrounding SMI are complex and this brochure can only detail a few key points. It s vital that anyone hoping for benefits support gets expert advice before committing themselves and, as with any other homeowner, it s important to be aware of the following: Your home may be repossessed if you do not keep up repayments on your mortgage. The overall cost for comparison is 6.3% APR. MySafeHome is authorised and regulated by the Financial Services Authority. A fee of up to 1,500 per applicant is payable for The MySafeHome Solution. This is fully refundable if for any reason the mortgage is not completed. 10 Helping people with a disability buy a home of their own - a guide for families and professionals.

11 Home Purchase Fees Of course, on top of the mortgage, there are other costs associated with buying a home. Some of these approximate fees are listed below: Valuation Fee 250 Solicitor s Fee 900 Lender s Mortgage Booking Fee 350 The MySafeHome Solution Fee 1500 (this is fully refunded if for any reason the mortgage is not completed) 3000 Total Typically the building insurance policy is organised by the Housing Association. Contents insurance is recommended and is the responsibility of the homeowner. In addition to the above costs, homeowners will obviously need money to pay for furniture and furnishings once they ve moved into the property. Helping people with a disability buy a home of their own - a guide for families and professionals. 11

12 The MySafeHome Solution TM Turning hopes into homes The process of buying a property can be daunting enough for any of us. In the past a disability unfairly magnified the problems faced. Not any more. Working closely with potential Buyers, Lenders, Housing Associations, Local Authorities and Care Providers the unique MySafeHome Solution makes each step as stress free and straightforward as possible. It s tried and tested too, by hundreds of happy, safe homeowners. Here s how it works: The MySafeHome Pre- Mortgage Application In the first step of the process we address all financial and state benefit considerations to ensure the viability of the proposal. We ll communicate our unique process and detail the appropriate requirements in order to maximise the chances of approval. The MySafeHome Solution Presentation In the second step, one of our mortgage advocates will visit the applicant and their circle of support to fully explain the details of the scheme and answer any questions. The MySafeHome Mortgage Accelerator Using our streamlined and tested process we ll provide assistance in completing the mortgage application and collecting the supporting paperwork. Thanks to our considerable experience in this field and strong relationships with our lenders we can really accelerate this process often gaining approval in just three to four weeks. 12 Helping people with a disability buy a home of their own - a guide for families and professionals.

13 1 5 6 Care Provider MySafeHome Applicant The MySafeHome Solution TM Housing Association Local Authority The MySafeHome Mortgage Lifetime Tracker Through this unique mortgage offer we re able to provide protection for the home purchase against interest rate rises and the full term of the mortgage. In addition we add value by thoroughly checking the mortgage offer before exchange of contracts, further protecting the applicant from any setbacks or surprises. The MySafeHome Mortgage Payment Support For maximum peace of mind we ll ensure that mortgage payments are paid by the Benefits Agency as soon as possible. During this initial period we also ensure the homeowner doesn t receive any mortgage arrears letters. For a further three years we ll check that mortgage payments are maintained (this is monitored on a quarterly basis) and provide reinstatement support if required. The MySafeHome Legal Assistance The final step of the process is really a safety net so that, in the unlikely event that the Benefits Agency refuses to make the mortgage payments, we ll support the homeowner by requesting a formal review of the case. If necessary we ll even organise representation at tribunals. Helping people with a disability buy a home of their own - a guide for families and professionals. 13

14 The Risks Paid employment and planning for paid employment Disabled people who have paid work of more than 15 hours per week (Jan 2009) may not get help towards their mortgage payments (SMI benefit). This needn t stop them getting a mortgage, however it may limit the amount they can borrow. Earnings from paid employment could cancel out the benefits that help towards their payments. This could then make the mortgage unaffordable. So if a buyer s planning regular paid employment in the future they need to ensure that any mortgage they take out will still be affordable. Rent and service charges will also be affected. Who will live in the new home? The benefits received by disabled people towards their mortgage payments could also be reduced or cancelled if they live with people over 18 years of age including children or older relatives. However this may not be the case with a live in carer or support worker. So, if either of the above issues apply, it s vital that the prospective buyer seeks advice from a benefits professional before committing to a mortgage. 14 Helping people with a disability buy a home of their own - a guide for families and professionals.

15 The Role of the Housing Association Most Housing Associations will work closely with people to help them own their own property. This support could include: Obtaining funding from the Government. Managing the selection process. Helping to find properties as well as negotiating the purchase price and managing the process with the seller s agents if necessary. Buying the property and creating a Shared Ownership lease that includes repair and maintenance as appropriate. Carrying out minor repairs and improvements to the property. Liaising with local authorities/care professionals to ensure that care and support is in place for the move. Once the homeowner has moved in the Housing Association may make regular visits to provide additional help, support and advice. Some Housing Associations will also: Monitor housing benefit payments and liaise with the Benefits Agency if required. Carry out more extensive property repairs and maintenance. Keep in contact, especially in the first few weeks of home ownership, to make sure the homeowner has settled in. Not all Housing Associations will offer all of the above support and services. It is important to establish from the outset how much help will be given. Helping people with a disability buy a home of their own - a guide for families and professionals. 15

16 The Role of the Solicitor It s important that buyers have an independent solicitor, someone who isn t acting for the Housing Association. The solicitor s job is to guide people through the process of buying their own home. This includes: Giving them advice on the Shared Ownership lease. Explaining the homeowner s obligations and responsibilities. Preparing all of the legal paperwork. Arranging the exchange and legal completion of the home purchase. There are a number of solicitors who specialise in Shared Ownership and we can recommend one from our panel. If the chosen solicitor isn t familiar with the processes involved we ll be happy to work together with the Housing Association to ensure that they understand every step. 16 Helping people with a disability buy a home of their own - a guide for families and professionals.

17 How to apply It really couldn t be easier. If you re a potential buyer, a family member, friend or carer, just get in touch with one of our team and we ll talk though the process in more depth. We ll then direct you to a suitable Housing Association. Alternatively you can approach local Housing Associations and ask them for details of available schemes and properties for Shared Ownership. For details of your local Housing Associations contact the HomeBuy agent for your area. A list of Government HomeBuy agents can be found at When you contact the appropriate Housing Association an application form should be completed, some of the questions will include: Information about the purchaser and where they currently live. The level of support required. Where the buyer would like to live. Details of the buyer s current income and benefits* * Housing Associations will use these details to work out if the buyer can get a mortgage to purchase and afford to live in their new home. Housing Associations may not be aware that disabled people who rely on state benefits to make up their income can get a mortgage to buy their own home. We always suggest this is mentioned on the application. To improve the chances of acceptance it may help if you obtain a Decision in Principle from us to attach to your Housing Association application form. This is obtained free of charge by completing The MySafeHome Pre Mortgage Application. For a copy, contact us on or visit our website This Decision in Principle is confirmation that the disabled person would appear to qualify for a mortgage and details the mortgage that could be available. This is not a guarantee however and, as with any mortgage offer, the final decision relies on a full application being made to the lender. For further information on home ownership for people with disabilities please contact: MySafeHome Limited, 1 Sycamore Court, Birmingham Road, Allesley, Coventry CV5 9AU Telephone: enquiries@mysafehome.info Website: Helping people with a disability buy a home of their own - a guide for families and professionals. 17

18 Does the disabled person have legal capacity? Do they understand the meaning of a contract? This is important as the home ownership process involves contracts. If the disabled person does not have the capacity to understand that they are buying their own home and what that involves (even after giving them as much support as possible) then the appointment of a Deputy will be required via the Court of Protection before a property can be identified and purchased. This process can take up to 5 months, so if there s any doubt about a person s legal capacity please speak to their Social Worker, Care Manager, Housing Association or us as early as possible. The appointment of a Deputy enables a family member or somebody else who is trusted and has legal capacity to sign the relevant paperwork on behalf of the homeowner. It s important to note that the property will always belong to the disabled person though. Upon submission of the application form somebody from the Housing Association will normally arrange to meet the applicant, their circle of support or their relatives and care managers to get a full picture and assess what can be done to support the purchase. MySafeHome were absolutely fantastic! If anything happens to us we know Ruth is secure in her own place. They give great peace of mind for parents unbelievable. Mr W, father of Ruth. Leicester It s your move We hope this brochure has both inspired and informed you and shown that, when it comes to home ownership, having a disability no longer means being discriminated against. Whoever you are and whatever your situation our unique processes, comprehensive support and extensive experience make us your ideal partners. We ve already turned hope into homes for hundreds of people. So, whether you work with a Housing Association, Care Provider or Local Authority, or are looking to buy for yourself, a family member or friend, we can make a real difference. It s your move 18 Helping people with a disability buy a home of their own - a guide for families and professionals.

19 Your Notes

20 Contact Details For further information on home ownership for people with disabilities please contact: MySafeHome Limited 1 Sycamore Court Birmingham Road Allesley Coventry CV5 9AU Telephone: enquiries@mysafehome.info Website: Your home may be repossessed if you do not keep up repayments on your mortgage. The overall cost for comparison is 6.3% APR. MySafeHome is authorised and regulated by the financial services authority. A fee of up to 1,500 per applicant is payable for The MySafeHome Solution. This is fully refundable if for any reason the mortgage is not completed.