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Q1. What is New Build Home-Buy?
A1. It is the new name for 'Shared Ownership'.
Q2. What does 'Shared Ownership' mean?
A2. Shared Ownership (New Build Home-Buy) is a scheme operated mainly by housing associations, that enables a purchaser to buy a share of a property (usually 50%) and pay rent on the remainder. The more of the property that is purchased, the less rent is paid.
Q3. Can I buy more of the property later?
A3. Once the initial share of the property has been bought, further shares can be purchased at any time during the term of the lease. In practical terms the minimum additional share to buy would be 10%, but any amount up to the remaining percentage can be purchased until you own 100% of the interest in the property. This is called 'Staircasing'.
Q4. How does the scheme work?
A4. Everyone knows that property can be expensive. Shared ownership is a scheme that comes to the aid of people wanting to buy a home and start climbing the property ladder. It provides an opportunity to purchase a percentage share (usually 50% but can be more or less - depending on the site) of a property and pay a subsidized rent on the remainder. This means that monthly outgoings are split, part mortgage and part rent, with the remainder of the property available to purchase in additional shares over a period of time. For example to purchase a 50% share of a property valued at £150,000, a 10% deposit would only be £7500 and to buy a 40% share, it would drop to £6000.
Q5. How do I qualify for Shared Ownership?
A5. There are a number of criteria which need to be considered when thinking about this option. The guidelines are as follows: * You must not be able to afford a property that fulfils your needs on the open market. * You must have a joint income of less than £60,000 p.a. in the case of a couple. * Single applicants must not earn more than £38,000 p.a. * You must have enough savings to cover solicitors fees and the general expenses of moving (Approx. £2500) * You must be a first time buyer or existing home-owner, whose requirements (due to size of family mainly) are a larger property that is unaffordable on the open market. Other applicants, such as divorced/separated couples can also be considered as long as they have sold their previous property. * You must be able to arrange a mortgage through a 'high street' or reputable internet lender. Please note: Applicants who have been in mortgage or rent arrears within the last year are not eligible.
Q6. How much would the rent be?
A6. As an example, a 50% purchase of a property valued at £150,000 would attract a rent of £156.25 per month.
Q7. Who is the rent paid to and how?
A7. The rent (plus any service charge and buildings insurance) is paid to Kingfisher by direct debit.
Q8. Who is the contact for maintenance/service issues?
A8. As part of the lease, the shared owner is responsible for the upkeep of their own property. Communal areas within apartment blocks are usually looked after as part of the service charge, so any maintenance issues should be reported to Kingfisher customer services on 0800 988 4858.
Q9. What are the costs?
A9. To find out how much the mortgage repayment would be, it is essential to seek independent mortgage advice to find the best deal available for you. There are other various costs involved when buying a property, for example: Legal fees, Mortgage arrangement and Valuation fees. Also stamp duty land tax is usually payable in respect of shared ownership transactions depending on the value of the property and the other options that are taken. Independent advice should be sought from your solicitor in respect of the options available to you. Any other questions regarding stamp duty can be raised with the HM Revenue & Customs Helpline: 0845 603 0135. The purchaser must have sufficient savings to cover these costs. All shared ownership properties are Leasehold and therefore usually attract a service charge. In the case of houses, the Freehold would usually be transferred to you on 100% staircasing. The service charge for flats usually includes buildings insurance as well as a charge for the cleaning and/or maintenance of communal areas, grounds, lifts (where installed), car parks, as well as the roof, foundations and structure of the building. Please ask for details for any particular scheme that is of interest. Once a property is purchased there are the day-to-day running costs to take into account; Council Tax, Utility Bills, Rent, Service Charge, Mortgage and the costs of general maintenance and repair, as with any home ownership.
Q10. Can I sell my property in the future?
A10. Yes, you can sell at any time. To do so: * You must contact us in the first instance, to inform us of your decision. * You must follow the procedure set out in the lease. * An independent valuer will assess the market value of the property (At your cost). * You must give us the first option of finding a buyer for you. (In some cases we may even buy the property back from you.) In either case there would be a fee payable to us of 1% plus vat of your share of the price achieved. If we cannot find a buyer for you, you can sell the property on the open market through an estate agent, at your cost, providing you follow the procedure laid down in the lease.
Q11. I am interested in buying a shared ownership property. What do I do now?
A11. Step 1: You must register with your local Government-appointed 'Zone' agent. In Hampshire it is Swaythling Housing Association (www.homesinhants.co.uk). Who will supply you with a reference number which we will need to process your application. Outside of Hampshire, there will be a different Zone agent to register with - please call us for details. Step 2: Once you have selected your proposed purchase, it is essential to make mortgage enquiries. We would always recommend taking advice from an independent mortgage advisor. You must take into account not only the mortgage payment you would have to pay, but also the rent and the service charge when making financial calculations. Once you have an Agreement in Principle (Which may be called a Mortgage Guarantee, Mortgage Certificate or similar) from a lender, we would need a copy of this, as well as confirmation of your monthly mortgage repayment. Step 3: Arrange to meet with one of our sales executives at your preferred site. Once you have confirmed that you would like to buy a unit, we will be able to reserve it for you, but we need to complete some more paperwork in order to do so. We will need to see proof of earnings, evidence of identitiy, proof of deposit and the aforementioned AiP and Mortgage repayment amount. Once we have this information, we can check that your new property will be affordable for you. Once this is confirmed we will ask you which Solicitor you wish to use, so we can write to them and commence the legal process of buying your new home!
Q12. How can I contact you if I am unsure of anything?
A12. Please phone us on 01256 302315 or e-mail us on sales@kha.org.uk. Our postal address is: The Sales Team, Kingfisher Housing Association, Saxon Court, Sarum Hill, Basingstoke, RG21 8SR
Q13. What is Rent First - Buy Later?
A13. This is a new scheme that we have introduced to help prospective buyers who are finding mortgages difficult and expensive to obtain at the moment. The idea of the scheme is that it may be possible to rent your chosen property to start with and then proceed to purchase it at a later date when mortgage finance is more readily available.
Q14. How much would the rent be?
A14. The properties will be offered at what is called 'intermediate rent', which is subsidized and set at 80% of a comparable full market rent. Each property will be independently valued and the rent will then be calculated.
Q15. How long would the lease be?
A15. The properties would be offered on an assured shorthold tenancy of 6 months. At the end of this period, if we have the opportunity to sell the property on a shared ownership basis, then this is what we would wish to do. We would contact you towards the end of your tenancy to see if you wish to proceed with a purchase.
Q16. Can I extend the lease?
A16. In some cases we may be able to extend the lease, but it would be subject to full compliance of the terms of the agreement. Any extension to the lease would include a release clause whereby either party can give notice.
Q17. Is a deposit payable?
A17. A deposit equivalent to one and a half months rent is payable on commencement of the tenancy.
Q18. When is the rent payable?
A18. The rent is payable in advance, on the first of the month, by direct debit.
Q19. Are there any other charges?
A19. Rents are exclusive of any service charge and utility bills. There will be other day to day costs to take into account such as council tax.
Q20. How do I apply?
A20. You must be registered with the local 'Zone agent' and be eligible for the scheme, in the same way as for shared ownership purchase. References will be required, including; credit checks, employment and landlord's references.
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