Buying A HomE THrougH shared ownership WiTH HAsToE

Transcription

1 Buying A HomE THrougH shared ownership WiTH HAsToE

2 1 The shared ownership scheme if you want to buy a home of your own but don t quite have enough money to do so, shared ownership could be the answer. We have written this booklet to answer the most commonly asked questions about shared ownership. If you don t find the answers you need in this booklet, please talk to one of our team on How does it work? An independent valuer will provide an open market valuation for the home. You will pay a proportion of that value depending on the size of share you are buying and can afford. Your share may be as little as 30% or as large as 75%. The minimum share you will be expected to buy depends on your household income and any savings you have. Hastoe will then charge you a rent for the share you do not purchase and a service charge. The rent is charged at no more than 2.75% of the unsold share. The service charge covers costs such as buildings insurance and estate maintenance. If, over time, you buy more shares and end up owning your home, you would no longer pay rent but may continue to pay a service charge. Who gets priority? Where there is a higher demand for new homes, eligible applicants must be prioritised. The government has set out the following priority order: l Existing council & housing association tenants and Ministry of Defence personnel l Local priorities agreed by Local Authorities or via planning conditions (these vary by Local Authority depending on local needs) What is shared ownership? Shared ownership is a government introduced scheme to help those who cannot afford to buy a home outright. This may be because they cannot afford the full mortgage repayments, the deposit or both. If this describes your position, we may be able to help. With this scheme you buy a share in the home and pay a subsidised rent on the remaining share. As and when your finances allow, you may buy a greater share until you own your home outright. However, you need to check with the sales team as many of Hastoe s rural developments have restricted staircasing (the size of share you can go up to) to 80%. This is to ensure the property is available for future generations at an affordable price.

3 2 The shared ownership scheme? do i qualify? if you are finding it hard to get on the property ladder and your household income is below 60,000 each year then you could be eligible for shared ownership. rural priority As many of our shared ownership properties are in rural areas, it is also likely that you will need to prove a local connection to the parish in which the homes are built, or the surrounding areas. Generally, a local connection means you are: l Currently resident in the parish l A previous resident in the parish but were forced to move away because of a lack of affordable housing in the area l Have close family who live in the parish l Have permanent and full time employment in the parish. We will ask the Parish Council to verify the local connection information provided. Other groups include: l First time buyers l Those who jointly owned a home but the relationship has broken down and cannot afford to buy on the open market l Existing shared owners who have outgrown their home but cannot afford to buy outright/ rent on the open market The size and type of home we will offer is based on three main factors: l Affordability l Household size l Your preference As a guide, we will generally offer: single applicants - one bed Joint applicants - one or two beds Couples/single parent families with one child - two beds Couples/single parent families with two children - three beds

4 3 Five steps to buying your new home step 1. registering If you would like to apply for a shared ownership home you will need to register with the HomeBuy Agent for your area (see the inside back page of this leaflet for details of your HomeBuy Agent). You may also need to register with your Local Authority or Parish Council. If you do not know who this is, please contact us and we can help point you in the right direction. You can also register your interest in a Hastoe scheme directly with us. step 2. offer of a property The Homes and Communities Agency (the government body responsible for affordable housing) has an affordability calculator which helps you see what is affordable based on your income and outgoings together with other factors such as interest rates and mortgage terms. These affordability calculators help us see what size share you could afford without the need to borrow more than you can sustain. As part of Hastoe s offer process, you will be required to be financially assessed by an Independent Financial Advisor (IFA). They will work through the affordability calculation for you at no cost. We will then offer you the share you can afford, which will be generally be between 30% and 75% of the property s value. If you are successful with your application you will be offered a property. Our sales team will send you an offer letter and information pack containing an acceptance of offer form. You will have one week to complete and return the form. step 3. Appointing a solicitor You will need to appoint a solicitor to carry out the legal work for you. They will: l check the lease and talk to our solicitors about any issues l Talk to your mortgage lender to make sure everything is in place l Carry out searches to check we own the home we are selling to you and that there are no known plans which could affect your home (such as new developments or roads) l Make sure that all paperwork is in place so the sale can go through. Solicitors costs will vary so it is worth checking with them what they are likely to charge before you appoint them. Typically it should cost between 600 and 1,000 including their fees, searches, land registry fees and expenses. We have a panel of experienced solicitors who can work for you. The solicitor will also carry out the conveyance - this is the legal process of transferring the ownership of the property to you. Your solicitor will check all of the legal documents, including the title deeds and lease. step 4. reservation of a property You will need to complete the acceptance of offer form providing us with details of your chosen lender and solicitor. You will also have to pay a reservation fee of 500 if you accept the offer.

5 4 You will be required to provide the IFA the following documentation: l HomeBuy registration number (you cannot reserve a property without this number) l Current passport or driving license l Proof of local connection such as electoral register details l 3 months bank statements (not internet copies) l Latest council tax bill and 3 months utility bills l Proof of deposit, if the deposit is a gift then a letter stating this from the person gifting the money to you l 3 months salary slips or 2 years audited accounts if selfemployed l latest P60 slip l Tenancy agreement or housing waiting list number. Once we have received this documentation we will send you a Memorandum of Sale. This contains details about the sale and is sent to you, your solicitor, your financial advisor and/or lender and our solicitor. From this point onwards your reservation fee is non-refundable. step 5. Exchange of contracts and completion When your solicitor has completed the legal work, you will be given a report detailing the findings of the conveyance. Once you have paid your deposit and signed the contract, the exchange of contracts between us can take place. For the exchange to happen, your solicitor will need a copy of your mortgage offer. The exchange of contract commits you to buying the home and us to sell it neither of us can change our minds. Completion will happen on a date agreed by the solicitors in consultation with you and us. This could take anything from a day to a week from the exchange of contracts. Upon completion, you will be expected to pay the first month s rent and service charge in advance. If your home is still being built when you buy it from us, we will let you know when it is ready this is known as completion on notice. On the day of completion your mortgage money is transferred from your solicitor to ours, who in turn will notify us that completion has taken place. We will then call you to let you know you can collect the keys and move in. When moving into your new home you will be supplied with a handbook which contains all the instructions for the services in your home such as the boiler and cooker. It will also cover all the information you need about what responsibilities you have as the home owner and what responsibilities we have as the housing association. We will take meter readings so you can give these to your electricity, water and gas suppliers. You will need to provide your deposit to your solicitor, which is paid to our solicitor on exchange. This is usually the deposit amount you used to secure your mortgage.

6 5 money matters What are the costs? How much money do i need? your household income should be sufficient to meet the costs of shared ownership (see right) but not enough that you could buy outright on the open market. You must have some savings or show us that you have access to the necessary funds. We have a panel of financial advisors who will contact you. They work independently of Hastoe. What about regular household bills? You will be responsible for a number of household costs including: l Council tax l Water and drainage l Gas l Electricity l Contents insurance. Will costs change over time? You need to consider your costs in two parts mortgage and rent. l Your mortgage may go up or down depending on interest rates and the type of mortgage you have. l Your rent is reviewed each year and will increase in line with the Retail Price Index. What happens if i miss mortgage payments? Your mortgage is covered by a contract between you and your bank or building society. If you fall behind with your payments the bank or building society may take possession of your home and then sell it to get its money back. What happens if i miss rent or service charge payments? Your rent is covered by a contract between you and Hastoe. If you fall behind with your rent we contact you to agree a payment plan. If this fails then we will contact your lender regarding payment of the arrears and this could be added to your mortgage. Remember, you may be entitled to housing benefit if your income is reduced and we can offer advice on where you can go for independent debt advice. If you remain in rent arrears and no positive action is taken, we may go to the courts to have your lease forfeited. This will mean you will have to sell the property. A reservation fee You will be asked to pay a reservation fee of 500 which would be deducted from the final purchase price. A mortgage valuation Your lender will arrange to value the home to check that it is worth the price you are paying. This will cost around 400 to 500. An arrangement fee Your mortgage lender will charge you a fee for arranging your mortgage. The cost of this will vary depending on your lender and the length and terms of your mortgage. This fee, which can range from 400 to 1500 is not refundable. Legal fees We strongly recommend that you instruct a solicitor to act for you. We will prepare a contract which, when signed by you and us, is legally binding. Costs range from 600 to stamp duty land tax This is a government tax on buying your home and the rules on stamp duty change from time to time. Your solicitor will advise you of current rates. deposit There will be a minimum deposit required by your lender depending on the value of the home. This usually between 10 and 20% of the price of the share you are buying. Land registration fee This charge is set by the Local Authority and will be different depending on the area you are in. mortgage insurance Your mortgage company may insist on this. moving costs You will need to pay for your telephone line to be connected and any removal company costs.

7 6 Living in your home What are your rights and responsibilities? When you buy a shared ownership home you take on a lease and so become a leaseholder. you will have the same rights and responsibilities as a full owner-occupier. We will be the freeholder. If you live in a house and decide to buy the remaining share you will more than likely become the freeholder too. If you live in a flat, you will remain a leaseholder because the block and the responsibility for communal areas will stay with us. Who pays for repairs? If your home is a house, you will be responsible for all internal and external repairs and redecoration. We will insure the structure of your home and you will have to pay a service charge to cover this and to cover the cost of rent collection. If your home is a flat, you will be responsible for all internal repairs and redecoration. We will undertake to keep the building in good structural repair. We will also insure the structure and keep any common parts such as the staircase and corridors decorated, cleaned and lit. You will pay a service charge to cover these costs. We will tell you how the service charge is spent and will consult you before doing any major repair or maintenance work. You should note that you will be given a certificate from the National House Builders Council or equivalent. This means the builders are responsible for remedying any defects due to their workmanship or materials which arise in the twelve months from the date the properties are handed over to Hastoe.

8 7 increasing your share - staircasing selling your home - resales How do i buy further shares in my home? You may, if you wish, purchase further shares in your home, up to a maximum of 80% or 100% depending on the restrictions within your lease. If you wish to do this, you will need to write to let us know. Once we get your letter, we will arrange for your home to be revalued by an independent valuer. You will have to pay the cost of this. If you decide to proceed with buying more shares you would then need to appoint a solicitor. If you do buy more shares, your rent would decrease accordingly. What do i have to do if i want to sell? if you want to sell your home you need to write to us. We will then appoint an independent valuer who will value your home. you will have to pay for this valuation. you will have to sell on the same percentage as you own, so if you own 40% you sell 40% of the value. Who can i sell to? Once the value has been set, your lease will set out a time period in which we have the opportunity to nominate up to three people to whom you can sell your lease. If the sale to the first person falls through, you offer the sale to the next person and so on. If all three offers fall through, or if we are unable to find any nominees within this period, you may find a buyer yourself but they would have to be a local person, where necessary, and approved by us. We are entitled to a fee of 0.25% of the total market valuation to cover the cost of finding someone to buy from you. You will not, of course, need to pay for an estate agent who would generally charge between 1% and 2%. is there anything else i need to do? You will need to have an Energy Performance Certificate which calculates how energy efficient your home is. We can give you a list of qualified assessors.

9 8 Homebuy agents Example breakdown of costs Figures based on house valued at 150,000 with purchaser buying 50% share. Find your nearest Homebuy agent... Buying costs deposit 7,000 mortgage 68,000 (therefore rent paid on remaining 50%) other costs (examples only) reservation fee 500 solicitor VAT solicitor s costs Searches: 100 to 300 Land registry: 100 to 300 stamp duty (if applicable) Based on value of home Lender s fees 400 Valuation fee 200 removal costs 150 (plus first month s rent and service charge) Bedfordshire, Cambridgeshire, norfolk and suffolk Orbit Tel: Kent, sussex and Essex Moat Tel: Hertfordshire Lea Valley Homes Tel: Avon, Cornwall, devon, dorset, gloucestershire, somerset and Wiltshire South West Homes Tel: Berkshire, oxfordshire, Buckinghamshire, milton Keynes and surrey Catalyst Tel: Hampshire Swaythling Housing Tel: Lincolnshire EM HomeBuy Tel: East, north and West London Metropolitan Housing Group/Housing Options Tel: south East and south West London L&Q Tel: HomeBuy Agents do change from time to time. Please see: for the latest information.

10 9 our pre-sale promise to you Buying your first home is the fulfilment of an aspiration for many people. so it s important to make sure you are buying into a shared ownership scheme that is sold fairly, professionally and has high standards, with your interests at heart. Over recent years a number of different types of shared ownership scheme have been developed. We develop and sell the governmentbacked, standard shared ownership scheme. This offers you a level of consumer fairness and reassurance which other schemes may not. When you buy a shared ownership home through Hastoe Housing Association we make you the following promise: you are buying through a government-recognised, not-forprofit provider Any surplus we make is used to develop more new homes or to improve homes and the communities where we work, not as profits for shareholders. We will use the government s shared ownership lease, as agreed with major high street mortgage lenders The lease we use contains fair terms, as approved by government, and is accepted by the major banks and building societies who provide shared ownership mortgages. We will carry out a proper and fair assessment of your ability to buy and sustain a shared ownership home; based on government guidelines We use the government s approved Affordability Calculator to make our assessment. If you are not eligible we will tell you why and try to suggest alternative suitable housing options. We will make available a list of qualified financial advisors and solicitors who are fully independent, understand shared ownership and can help make sure your mortgage and legal transaction go smoothly There is no obligation for you to use them, but using advisors and solicitors who understand shared ownership may save you time and money. We will only charge rents in accordance with government guidelines The rents we charge on the part of the home you do not own are capped by the government to ensure they remain fair and reasonable. The value of the home you buy will be a fair market value We always take advice from qualified chartered surveyors on our selling prices and we will keep prices as affordable as possible. The home you buy will be built to high energy efficiency standards All housing association built homes are required to meet high, modern energy efficiency standards. you can buy more shares in your home, up to a maximum of 80% or 100% depending on restrictions within your lease, when the time is right for you There is no obligation for you to buy additional shares, it s up to you but we are here to advise you when you want to explore this option. When you choose to sell we will help you find a buyer Your lease will give us a period of time, usually eight to twelve weeks, to find a buyer for your home. For rural schemes in particular, we use this time to find another purchaser with the right local connection who is in need of a shared ownership home. We will manage your service charges in a clear and consistent way We will explain what any service charge covers before you buy your home. We will give you access to a fair and transparent complaints process We publish a clear complaints process which you can use if you are unhappy with any aspect of our service. This includes recourse to the independent Housing Ombudsman if you exhaust our process and the issue is unresolved. Hastoe has been developing and managing government-backed shared ownership homes for over 25 years. We currently own and manage over 400 shared ownership homes. Buying from an established, experienced shared ownership provider may prove important when you come to sell your home. We are a rural specialist and work closely with communities to develop new homes to meet the needs of local people. We are committed to sensitive, sympathetic design and high standards of environmental build and performance.

11 10 We will guide you through the entire sale. We will answer your enquiries within an agreed, published timescale and give you a named contact. We will explain what you need to do and what we will do during the process. You can get in touch with our Sales Team at any time with questions about buying a shared ownership home. We will only charge rents in accordance with government guidelines The rents we charge on the part of the home you do not own are capped by the government to ensure they remain fair and reasonable. The value of the home you buy will be a fair market value We always take advice from qualified chartered surveyors on our selling prices and we will keep prices as affordable as possible. The home you buy will be built to high energy efficiency standards All housing association built homes are required to meet high, modern energy efficiency standards. you can buy more shares in your home, up to a maximum of 80% or 100% depending on restrictions within your lease, when the time is right for you There is no obligation for you to buy additional shares, it s up to you but we are here to advise you when you want to explore this option. When you choose to sell we will help you find a buyer Your lease will give us a period of time, usually eight to twelve weeks, to find a buyer for your home. For rural schemes in particular, we use this time to find another purchaser with the right local connection who is in need of a shared ownership home. We will manage your service charges in a clear and consistent way We will explain what any service charge covers before you buy your home. We will give you access to a fair and transparent complaints process We publish a clear complaints process which you can use if you are unhappy with any aspect of our service. This includes recourse to the independent Housing Ombudsman if you exhaust our process and the issue is unresolved. Hastoe has been developing and managing government-backed shared ownership homes for over 25 years. We currently own and manage over 400 shared ownership homes. Buying from an established, experienced shared ownership provider may prove important when you come to sell your home. We are a rural specialist and work closely with communities to develop new homes to meet the needs of local people. We are committed to sensitive, sympathetic design and high standards of environmental build and performance. You can get in touch with our Sales Team at any time with questions about buying a shared ownership home.

12 Sustainable homes, sustainable communities For further details of how shared ownership works, eligibility criteria or properties available please contact or call Hastoe Housing Association Limited Marina House 17 Marina Place Hampton Wick Kingston upon Thames Surrey KT1 4BH Tel: Fax: Web: