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buying your own home

What is New Build Homebuy

New Build Homebuy is a ‘stepping stone’ between renting and owning your property. It helps people who would not otherwise be able to afford to buy a home.

How does it work?

You buy a share, usually between 25% and 75%, and pay rent on the part that you do not own. On most of our schemes, people usually have to buy at least 40%, but we agree what you can afford to buy so you do not overstretch yourselves financially.

You will need to get a mortgage from a qualified lender, or have personal savings for the share of the property you are buying.

When you complete the purchase, we will give you a 99-year lease. The lease sets out your and our responsibilities.

What are the costs?

It is important to consider the costs and responsibilities of buying your own property before making a decision to buy. These include the initial purchase costs and the ongoing costs.

Purchase costs

We suggest that you have savings of between £2,000 and £4,000 to cover the costs of buying, depending on the value of your property. These costs include:

• our reservation fee;
• a valuation fee;
• legal fees;
• stamp duty; and
• any bank or building-society arrangement fee for the mortgage.

You should check all of these costs before you go ahead.

Your responsibilities and ongoing costs

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 our approved financial advisers to explain the different types of mortgages available and to work out which mortgage will best suit your needs.

Rent payments
It is important to remember that if you are having difficulties in paying your mortgage or rent, you should discuss the matter with your lender and our Leasehold Services Officer as soon as possible. You have to pay us your rent in line with the lease. If you fall behind with your rent or service-charge payments, we may take legal proceedings against you.

Insurance
We insure the building and recover the cost of doing so through a monthly charge. There is a £100 policy excess. This means that you pay the first £100 of any claim you make. You will need to take out another policy to insure the contents of your home from the date that you move in.

Service charges
In some cases, especially if you buy a flat or a maisonette, you may have to pay ground rent and service charges in line with the lease. Service charges will normally cover the costs of maintaining the shared parts of the building. We will give you details of these before you buy.

Repairs
When buying a property through shared ownership you will be responsible for all repairs and maintenance to the property in the same way as any owner-occupier.

Utility bills
You will be responsible for all household utility bills, including Council Tax.

Buying more shares

You can buy more shares in the property. You will buy all further shares at their current market value. This is called staircasing. You must buy at least 10% each time until you have bought the rest of our share. 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 from us). Some local authorities will restrict how much you can buy, especially in rural areas so the homes are always available to local people. We will let you know about any restrictions before you buy.

You do not have to buy further shares if you don’t want to. If you do, we will reduce the rent as necessary.

Alterations and improvements
You must get written confirmation from your Leasehold Services Officer before you carry out any work. You may also need to get approval from your mortgage lender, as well as any legal permission you need, for example, planning permission or building regulations.

Selling your property
You can sell your home at any time. Your lease says that you must give us up to 8 weeks to find a buyer. If we cannot find someone, you can then sell on the open market.

Please contact us for information on what you need to do before you contact an estate agent to sell your home for you.

If a leaseholder dies
If you hold the lease in a single name or as joint tenants, the shared-ownership lease can be passed on or sold in line with your will or the law of intestacy (dying without making a will). If you hold a joint tenancy, the lease automatically passes to the survivor.

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