Shared Ownership (Part buy Part Rent)

What is New Build Homebuy?

With New Build Homebuy you purchase an equity share in your new home, normally between 25% to 75% of the value, and pay a subsidised rent on the part you don’t own to Islington and Shoreditch Housing Association. The aim is to keep costs below those for outright purchase.

You will buy your home on a New Build Homebuy Lease that will normally be for 99 years for new homes. If you are buying a second hand property, the length of your Lease will be based on the number of years remaining since the original Lease was first issued.

Can anyone buy a New Build Homebuy property?

New Build Homebuy is for those people who cannot afford to buy a home outright on the open market, although you should be able to afford to pay your monthly mortgage, rent and service charge. You should also have some savings to cover your initial purchase costs.

Although New Build Homebuy is primarily targeted towards first time buyers, we are sometimes able to assist those who have previously owned a property. This could be because you have owned a property with a partner but that relationship broke down, your existing property is unsuitable for your needs or where you need to move to a higher value area for your employment or to look after an elderly or sick dependent relative.

We will not be able to help you if you have had any arrears of rent or mortgage in the past twelve months.

You must have a good credit history with no record of County Court Judgements or loan defaults registered against you in the past twelve months. Any previous debts should be fully paid and a Certificate of Satisfaction of Debt provided.

You must be an EU citizen or have a permanent right to reside in the UK.

What are the Initial Costs Involved in the Purchase of my New Home?

The initial costs involved are:

• Holding/Administration Fee

When you come along to view our properties, you will be given the opportunity to place a holding/administration fee of £250 on the property of your choice. If we are unable to offer you your choice of property, your cheque will be returned to you. If you accept an offer of a property from us and then do not proceed to complete your purchase, we will retain this fee to meet our legal and administrative costs.

• Survey and Valuation Report

Your mortgage lender will want to make sure that the property you are buying is in a reasonable condition and is worth the money that we are asking you to pay. They will therefore want to carry out a survey on the property before you buy. If it is a new property, a mortgage valuation will generally be sufficient. If you are buying a second hand shared ownership property, a more in-depth survey will be required, normally a Homebuyer’s Report and valuation.

• Legal Fees

You will also need a solicitor to act on your behalf and solicitor’s fees do vary. Always obtain a fee quotation from your solicitor before you proceed, and make sure you ask them about any disbursements, ie. additional costs on top of their fee.

• Stamp Duty

All properties over a certain value are subject to Stamp Duty at completion of purchase and your solicitor will advise you of the current rate at which this is payable and how it should be paid.

• Deposit on Exchange of Contracts

When you exchange contracts on your new home, we will ask you to pay a further £250 deposit. This will be added to the holding/administration fee you have already paid to form a total deposit on exchange of contracts of £500. When you complete your purchase we deduct any rent and service charge payable for the time between completion and the date on which your next payment is due, together with one full month’s rent in advance. The remainder of your deposit will be deducted from the purchase price.

• Mortgage Deposit

Some mortgage lenders may give you a mortgage for the full value of the equity share you are buying, subject to status. However, you may be required to fund the first 5% of the purchase price. Always seek independent financial advice and make sure you can afford the mortgage repayments before entering into a credit agreement.

• What are the costs once I move in?

If you have taken out a mortgage to buy your home, there will be a monthly mortgage payment. There will also be the monthly rent to Islington and Shoreditch Housing Association on the part you do not own, which is payable monthly in advance. If there is a service charge on your new home, this will also be payable monthly in advance.

With some properties, usually flats, there will also be a service charge payable to cover the cost of maintaining the exterior of the building and any communal areas. Your service charge may also include a contribution to a sinking fund. This is to make sure that if any major works are required to the communal areas or exterior of the building in the future, you will not have to find a large sum of money to pay for these.

The service charge is payable even if you purchase your home outright in the future.

You will be responsible for your household bills.

Can I buy more equity in my home?

You are now able to purchase additional equity shares in your home from the day you complete on the initial purchase and even purchase the whole property outright. Please note that some Leases may only allow you to purchase up to a specified percentage of the equity in your home. If this is the case, we will always make this clear on our sales material for the scheme.

As you only pay rent on the part that you do not own, it means that the more equity you own, the less rent you pay. If you purchase your home outright, there will not be any rent payable. If the property you buy is a house you will normally be given the freehold when you purchase it outright.

When you tell us that you wish to purchase more equity in your home, we will instruct an independent valuer approved by the Royal Institution of Chartered Surveyors to determine the new value of your home. The price you pay for any additional equity will be based on this valuation. You will have to meet the cost of this valuation.

Can I sell my home?

Just like any other homeowner, you may sell your home whenever you choose. To ensure that your home can then be made available to others who cannot afford to buy outright, we will, for a short period, have the right to find a buyer for your home. Although we charge a small fee for this service, it is normally less than you would pay an Estate Agent. If we are unable to find a purchaser within the period specified within your Lease, then you are free to make your own arrangements to sell your home.

When you tell us that you wish to sell your home, we will instruct an independent valuer approved by the Royal Institution of Chartered Surveyors to determine the new value of your home. You then inform us that you are happy with the valuation upon which we shall nominate a purchaser for your share. The price you sell your property to our nominee may not be higher than this valuation. You will have to meet the cost of this valuation.

How do I apply?

To register an interest in our available properties we will usually have details of how to do this on specific marketing pages of any available scheme. Any available properties will be advertised via our website as well as www.housingoptions.co.uk and www.stagnellfox.com. Once you have registered an interest for any schemes, our consultants will check to see if you are eligible and will let you know if your application is accepted.

As demand for New Build Homebuy often exceeds the number of properties available, it is possible that we may be unable to help you even if you qualify. However we always tell you of the current position.