This Policy applies to eligible Knightstone tenants wishing to purchase their rented home using the Social HomeBuy scheme

Transcription

1 Social HomeBuy Policy Policy ref: Social HomeBuy Policy Approved by: Director of Development & Home Ownership Policy author/policy holder: Head of Sales & Marketing Date approved: July 2017 Effective date: August 2017 Date of next review: July :: Purpose Social HomeBuy is a non-statutory scheme and is offered only to eligible applicants when funding is available. It is not available to be used on all properties owned by Knightstone and qualifying criteria applies to those tenants interested in participating in the scheme. This policy sets out how Knightstone will implement Social HomeBuy in accordance with the regulations set by the social housing regulator, the Homes and Communities Agency. 2 :: Scope and definitions Scope: This Policy applies to eligible Knightstone tenants wishing to purchase their rented home using the Social HomeBuy scheme Social HomeBuy allows eligible Knightstone tenants who occupy eligible properties to purchase their social or affordable rented housing at a discount either outright or on Shared Ownership terms. The policy has regard to our status as a charitable housing association. We take into account the guidance on the housing need and affordability of customers for our homes set out in Her Majesty s Revenue and Customs Charity Commission guidelines. These guidelines require our policy to be based on affordability as well as ensuring those who can satisfy their housing need elsewhere are not assisted by Shared Ownership. Definitions: Rural areas Properties situated in rural areas are designated by order of the Secretary of State under section 17(1)(b) (Right to Acquire: Supplementary Provisions) of the Housing Act Whenever someone applies for social HomeBuy we check this. Social HomeBuy (SHB) Where a Registered Provider (ex RSL or local authority) has decided to offer Social HomeBuy, purchasers are allowed to buy their rented home outright at the outset or on shared ownership terms. The cost of any share will be based on a percentage of the full market value. Please refer to online resources for most up to date version Page 1 of 5

2 3 :: Policy The principle aim of this policy is to ensure that the homes we offer for sale through the Social HomeBuy scheme are made available to qualifying applicants in a fair and transparent manner. 3.1 Qualifying Criteria Properties Not all properties owned by Knightstone are subject to Social HomeBuy. Excluded and exempt properties are set out below: Properties which are excluded from the Right to Acquire by the Homes & Communities Agency are excluded from Social HomeBuy, for example properties in designated rural or protected areas, or those let in connection with employment. Properties where there is a planning condition precluding their sale, for example, a Section 106 agreement which restricts a sale that is not a statutory right Properties which are specifically provided for people of pensionable age Properties which are uneconomic for Knightstone to sell Properties which are charged to a Knightstone funder unwilling to release their charge against the property Properties which have a defective title may be excluded from Social HomeBuy Shared Housing Properties which have been subject to specialist adaptations Properties provided as part of Seaside and Country Homes Where it is discovered subsequent to an application being approved that a property is ineligible for reasons which were not previously apparent, Knightstone reserves the right to reject such an application. Applicants Knightstone tenants living in a social or affordable rented home can apply to buy their home through Social HomeBuy if: They have been a tenant of Knightstone for 3 years or more. The 3 years do not need to have been in sequence, except in cases where Knightstone has bought the tenant s home under a mortgage rescue arrangement Their Knightstone home is their main or principal home They have an Assured Tenancy or an Assured Shorthold Tenancy with a fixed term of at least two years beginning on or after 1 April 2012 Under the Social HomeBuy scheme, tenants can make joint applications with: A joint tenant of their tenancy Up to 3 family members who have lived with them for at least 12 months before their application to use Social HomeBuy Subject to the above criteria, tenants on fixed term tenancies will be eligible for Social HomeBuy except in the following circumstances where: Their tenancy has a fixed term of less than 2 years They are renting an Intermediate Rent property They reside in a property acquired by Knightstone under a mortgage rescue scheme. Please refer to online resources for most up to date version Page 2 of 5

3 The following tenants cannot use Social HomeBuy: Tenants who either are or are being made bankrupt Tenants who are subject to an existing court order relating to their tenancy Tenants who have been ordered to leave their home by a court N.B. Tenants with rent arrears will be required to clear them before any sale is completed. In addition, where we believe tenants are engaged in antisocial behaviour, Knightstone will suspend a tenant s application to purchase their home under Social HomeBuy. 3.2 Shared Ownership purchases Where a tenant cannot afford to buy the property outright, they can use Social HomeBuy to buy a share of their home using Shared Ownership. The minimum initial equity share that can be purchased is 25% and the maximum is 90%. Where tenants are applying to buy their home on a Shared Ownership basis, the tenant s financial circumstances to assess whether or not the purchase is affordable for them will be assessed by an Independent Financial Advisor from Knightstone s panel. This assessment will factor in the discounts that tenants can receive under Social HomeBuy. If it is assessed that a tenant s application to buy their home on Shared Ownership terms is unaffordable for them, their application will be declined. 3.3 Discounts available under Social HomeBuy The discounts available through Social HomeBuy are the same as those available for the Right to Acquire scheme. Tenants buying their home through Social HomeBuy are entitled to a discount of between 9,000 and 16,000 on the price of their home. The amount of discount awarded depends on: Where the property is located Whether or not the tenant has benefitted from a Right to Buy or Right to Acquire discount in the past. If they have, the discount will be reduced by this amount A cap on discounts awarded on purchases, which means that the maximum discount that can be awarded is 50% of the property s value The discount available to a Shared Ownership purchaser will equal the percentage share being purchased, e.g. a tenant buying a 25% share of their home will be entitled to 25% of the stated discount available. If a shared owner subsequently buys further shares, they will be again be entitled to receive an equal percentage share being purchased, e.g. a tenant buying a 20% additional share of their home will be entitled to 20% of the stated discount available. 4 :: Managing Social HomeBuy applications 4.1 How Knightstone will manage Social HomeBuy applications Knightstone s Sales & Marketing Team will manage Social HomeBuy enquiries and applications: We will send the tenant an application form with the estimated value of their home and the discount information based on the assumption that they and the property are eligible. Please refer to online resources for most up to date version Page 3 of 5

4 The tenant then applies for Social HomeBuy by completing and returning the provided application form to the Independent Financial Advisor they have chosen from our panel. The Independent Financial Advisor will send their financial assessment report to us. We will then assess the application in full and confirm to the tenant their eligibility. Tenants will then have four weeks to decide if they want to proceed and must confirm this in writing. Knightstone will instruct a Chartered Surveyor to carry out a formal valuation of the property and send the tenant a formal offer. The date of the valuation will be the date of inspection of the property for valuation purposes. The tenant has 3 months from the date of valuation to exchange contracts and a further month in which to complete the purchase. If the tenant fails to exchange and complete the purchase during the prescribed period their application may be deemed withdrawn and a new valuation will have to be carried out if the tenant wishes to proceed and complete. The new valuation may be higher than the original valuation depending on the property market. Where a tenant is unable to exchange contracts within the 3 month deadline but is able to exchange and complete within 4 months from the date of the valuation, this will be allowed at the discretion of Knightstone s Head of Sales & Marketing. The Social HomeBuy scheme only offers applicants the opportunity to buy their existing home, the scheme cannot be used to purchase properties other than applicant s home. Knightstone will not process Social HomeBuy sales funded by mortgage providers who are not approved by the Financial Conduct Authority. 5 :: Future resales of properties purchased under the scheme 5.1 Nomination rights Knightstone has the right to nominate the next buyer of a home where a Shared Owner wishes to sell their share. The terms of the nomination arrangement for resales of Social HomeBuy homes will be set out in the Shared Ownership Lease. 5.2 Repayable discount Any discount received under Social HomeBuy must be repaid to Knightstone if the home is sold within 5 years. All of the above restrictions will be reflected in the Land Registry documents for properties sold under Social HomeBuy. 6 :: Service standards, monitoring and review 6.1 What do I do if I am not happy with the application process? If you feel that you have not been treated fairly for any reason, or have any complaint about an application for Social HomeBuy, please contact the Sales Team Leader at Knightstone in the first instance. Knightstone s Compliments and Complaints Policy can also be used. A copy of this is available on our Website at Please refer to online resources for most up to date version Page 4 of 5

5 6.2 Help and advice Any enquiries arising from this policy should be directed to the Head of Sales & Marketing in the first instance. 7 :: Legal considerations 7.1 Government legislation Government legislation and regulation has an impact on how Knightstone can implement its Social HomeBuy policy. Listed below are the key papers that are relevant and have been used in writing this policy: The Homes and Community Agency s Capital Funding Guide, which is available on their website The current Right to Acquire discounts are set out in the Housing (Right to Acquire)(Discount) Order 2002 (SI 2002 No 1091), which is available on the Government Website: 8 :: Linked /associated policies and other references Affordability Policy Compliments & complaints policy/procedures Please refer to online resources for most up to date version Page 5 of 5