1. Introduction The Voluntary Right to Buy (VRTB) is an 18 month government-led pilot scheme which gives assured tenants of housing associations in the Midlands area the right to buy their home at a discounted value. The pilot does not include tenants in supported or sheltered accommodation. Some homes may not be eligible and in those cases we will try to find an alternative property that you can buy. Before applying to us you must obtain a Unique Reference Number (URN) from https://midlands.righttobuy.gov.uk Please note, the website will be open for applications until midnight on 16 September 2018. 2. Your financial commitment Important things to consider before applying to buy your home: Getting a Mortgage It can be hard to get a mortgage as lenders have strict criteria on lending. For example they may choose not to lend if you have a poor credit rating, or they may not lend on some types of home due to construction or building height. We recommend that you check how much you can borrow before you apply. Claims for Housing Benefit will stop If you are currently claiming Housing Benefit, upon completion of your purchase, payments will stop and you will be unable to make a further claim. Affordability o If you have a poor credit rating lenders may charge you a higher interest rate, meaning you will pay more over the length of the loan. o After buying your home you will be responsible for all repairs and maintenance inside your property and, if you live in a house, the structure (including roofs, walls, windows etc) and buildings insurance as well. o Property values can go up or down and we will not buy back your property if you discover you can t afford the mortgage or you can t sell it. Repossession If you are unable to maintain your monthly payments your home may be at risk of repossession. It s therefore important that you read through this guide carefully to be sure about the financial responsibility you would be entering into. We recommend that you seek independent financial advice before buying your home.
3. Are you eligible? You must: have been a housing association tenant for at least three years (tenancies with other housing associations will count towards this) hold an assured, secure or Localism Act fixed tenancy be able to demonstrate that the property is your main home and that you have lived in it for at least the last 12 months show that you have the right to reside in the UK and can demonstrate that you meet immigration status checks have no rent arrears. You will NOT be eligible if you: have the Preserved Right to Buy have a supported tenancy agreement or live in sheltered accommodation hold an assured shorthold tenancy, a contractual tenancy or are a licensee have a fixed term tenancy of less than two years or a periodic assured shorthold tenancy (including a starter tenancy which has not converted). do not have the right to reside in the UK and cannot demonstrate you meet the immigration status checks are currently subject to the mortgage rescue scheme live in an alms-house have rent arrears* are subject to bankruptcy proceedings or unfulfilled credit arrangements. have committed anti-social behaviour as defined in Paragraph 11 of Schedule 11 to the Anti-Social Behaviour, Crime and Policing Act 2014 and where Metropolitan has initiated legal proceedings as a result. are currently subject to legal proceedings such as injunction proceedings or notice of seeking possession (NOSP). already own a property at the point of application hold an assured fixed term tenancy where the original term was 21 years or more only occupy a room or rooms in a shared house or flat are a shared ownership tenant. *If you are eligible but have rent arrears you will be allowed two weeks to clear the arrears and you must keep your rent account clear until you complete your purchase. Family applications Up to four family members may apply At least one applicant must be a named tenant and all applicants must be over 18 Each applicant must have lived at the property for at least 12 months (we will require evidence of occupation)
Family members cannot be added or removed during the application process (if you wish to add or remove anyone you will need to apply for a new unique reference number) If one member of a joint application is ineligible (for example they are a declared bankrupt or they do not have the right to reside in the UK) the application will be rejected and the other parties will need to reapply for with a new unique reference number. Supporting evidence We require 12 months bank statements or utility bills, such as council tax or gas/electricity statements. All applicants will need to attend an interview where the original documents will be checked. Please be aware that we will not be able to accept copies of any relevant documents. If you are unable to provide original documents your application will be rejected. 4. What if my home isn t eligible? Not all homes are eligible for the VRtB scheme. Your home may not be eligible if: we do not own the freehold of the property it is in a rural area and selling it would reduce the numbers of available affordable homes it was built under a S106 Planning Application which prevents us from selling it it was transferred to Metropolitan under a stock transfer agreement and the terms of the agreement prevent us from selling it and/ or imposes a financial or other restriction you live in a leasehold house the property has restrictive covenants or other legal restrictions which prevent us from selling it. If the property you live in isn t eligible, we will try to find an alternative property which you can buy so that you can still take advantage of the discount. Our policy is to: Make no more than one reasonable offer of an alternative property (if you refuse the offer, your application will be deemed withdrawn) Operate a like for like policy, for example applicants in a house will be offered another house and those in a flat another flat. Offer properties with one more or one less bedroom than your current home if your home is under or over occupied. For example if you are a couple who live alone in a 3 bedroom house, the alternative property offered could be a 2 bedroom house. Only make offers in the same or an adjacent local authority borough. Offer an alternative property at our normal lettable standard as any variation in the condition of your current home and the new property offered will be reflected in the valuation. We will not do further work on a property being offered in order to match the condition of your current home.
If we are unable to find a suitable alternative property within three months, we will ask you if you wish to consider alternative property types, location and size. If, after a further two months we are unable to find a suitable alternative we will inform you in writing and your application will be cancelled. How will the offer of an alternative property work? When a suitable alternative becomes available we will contact you with the details of the property and a desktop valuation amount. The valuation and the discount will be based on the new property offered rather than your current home. You must view the property within five working days and confirm your acceptance or refusal within seven calendar days from the date of viewing. If you do not respond within seven days or if you refuse the property, your application will be cancelled and no further offers will be made. If you accept the offer, you will have three weeks in which to move into the new property. If you are unable to move within three weeks, the offer will be withdrawn and your application cancelled. Special consideration may be given to applicants with disabilities but this is at our discretion and must be agreed in advance. You will be given a one year fixed term tenancy on the property offered which should allow you sufficient time to complete the purchase. If you do not complete the purchase of the property within one year you will need to leave it and find alternative accommodation. Please be aware that we will not be able to rehouse you and you won t be able to return to your former home. 5. Our checks We have a duty to prevent and detect fraud. To meet this duty we will require an endorsed form of identification from each applicant before we are able to process your application. All applicants including family members joining the application will be required to attend a face to face interview. The main purpose is to check documentation to prove all of the applicants immigration status. 6. Deposit You will be required to pay a deposit of 250.00 after our initial checks but before we instruct the valuer. You must pay the deposit within five working days of our request or your application will be deemed withdrawn. The deposit will be refunded upon completion by offsetting against the amount you are due to pay. If you withdraw your application at any point or you fail to meet the timescales requested, please be aware that the deposit is non-refundable. If we are unable to find an alternative property which you can buy, we will refund your deposit in full. 7. Valuing your home You will be asked to select a valuer from our list of approved RICS qualified valuation firms. You must tell us which valuer you want to use within 5 working days of the date of us granting you the right to buy your home or the date you move into the alternative property offered.
We will formally instruct the valuer you choose and pay for the initial valuation. You may appeal once against the first valuation. Any appeal must be made within four weeks of the date we serve the Offer Notice to you. No appeal will be allowed outside of this time frame. If you want to appeal, please tell us and we ll send you a copy of our list of valuers. You must use a valuer from our list and you will have to pay for the second valuation. You will have eight weeks from the date of our letter to have the new valuation carried out. You must instruct the valuer to send us a copy of the valuation so we can serve a new Offer Notice. 8. Discount The VRTB scheme gives you a discount on the market value of your home if you qualify. The maximum discount is 80,900. This is based on: o o o how long you ve been a tenant with a public sector landlord; the type of property you re buying - a flat or house; the value of your home or the alternative property offered. If you re buying with someone else, you count the years of whoever s been a public sector tenant the longest. You might get a smaller discount if you ve bought a property with a discount in the past. There are different discount levels for houses and flats. Houses You will receive a 35% discount if you ve been a social housing tenant for between three and five years. After five years, the discount goes up by 1% for every extra year you ve been a social housing tenant, up to a maximum of 70% (or 80,900). Flats You will receive a 50% discount if you ve been a social housing tenant for between three and five years. After five years, the discount goes up by 2% for every extra year you ve been a public sector tenant, up to a maximum of 70% (or 80,900). More information on discounts and a discount calculator can found on: https://righttobuy.gov.uk/what-discount-could-you-get/ https://righttobuy.gov.uk/right-to-buy-calculator/ If your landlord has spent money on your home Your discount will be less if we have spent money building or maintaining your home in the last 15 years. You won t get any discount if we have spent more money than your home is now worth.
Selling your home If you sell your home within five years of buying it, you will need to repay some or all of the discount you received, depending on the date you complete the sale: Sell within discount repayable 1 year 100% 2 years 80% 3 years 60% 4 years 40% 5 years 20% Repayment of discount may not be required where ownership of the property is transferred under a will or through intestacy. You will also have to repay the discount if you sub-let the property within five years of buying it. 9. The costs and risks of owning your own home Repairs and Maintenance Buying your home is a big financial decision and one you should consider carefully before submitting your application. As a home owner you will be responsible for the cost of maintaining your home which includes all repairs. If you become a Leaseholder (buying a flat within a block) you will have to pay service charges each year and contribute towards the cost of major repairs and improvements for the block and estate. Service charges are subject to annual review and increases. It is also important to consider that unexpected expenditure can sometimes occur, for example an unexpected roof repair. Where unplanned works are carried out the costs would be charged to the individual homes within the block. You will be responsible for such costs. Freeholders (buying a house) living on an estate may also have to contribute towards an estate charge. Estate charges are subject to annual review and increases. Forward planning The value of your home may be taken into account if the situation arises where you need financial help with residential care or nursing fees. Mortgage payments If you buy your home with the help of a mortgage you will repay the loan, plus interest, usually by monthly instalments. If you use a Mortgage broker or adviser they may charge a fee.
Be aware that the value of your property may fall as well as increase and you may find the property falls into Negative Equity, which means your mortgage is larger than the value of your home. This could impact on your ability to sell or re-mortgage. If you are unable to keep up to date with the monthly mortgage payments your lender may apply to the court to take possession this is known as repossession - and you could lose your home. If this happens you may find it difficult to obtain a loan or a mortgage in future. You should speak to your lender as soon as possible if you are struggling with payments. Buying a lease If you are buying a flat or a maisonette you will be granted a lease. This is a formal contract and sets out the covenants (promises and obligations) that apply to the property. The lease will normally be granted for an initial period of 99 or 125 years. When the remaining term of a lease falls below 85 years it can have an impact on the sale price and effect the ability of prospective buyers to obtain a mortgage on the property as some lenders require a minimum number of years on the lease before they will consider lending. You may have a right to buy an extension to the term of your lease but this may be costly. Ground Rent Under the terms of the lease you may have to pay a set annual Ground Rent. This does not normally change on an annual basis. If you are unable to keep up to date with these payments we may, under the terms of the lease, apply to the court to take possession of your home and/or end your lease (this is known as forfeiture). If forfeiture is granted, you would be required to leave your home, you wouldn t receive any financial compensation and you would still be required to repay the mortgage. It is therefore extremely important that you are able to maintain your monthly payments. Charges for utilities As a tenant, charges for water and other utilities such as gas and electricity may be included within your rent. If you buy your home you will become responsible for all these costs and would need to contact the relevant suppliers to set up accounts and pay them directly. Insurance Buildings insurance: This covers the cost of repairing or rebuilding your home if it were to be damaged or destroyed. If you are buying a house you should ensure adequate cover is in place. If you are buying a flat or a maisonette the insurance will usually be arranged by us and we will recover the cost from you via service charges. Contents Insurance: It is your responsibility to insure the contents of your home against fire, theft and other potential risks. Your contents, which would include kitchens and bathrooms, would not be covered under the buildings insurance if anything were to happen to the building in the event of fire or other incident. Life Assurance: This would pay your mortgage off, if you were to die before the end of the mortgage period. It provides security for you and your family against unexpected events.
Mortgage Protection Insurance: Under certain circumstances this may enable you to maintain your monthly mortgage payments if you lost your income. Fees for buying your home Mortgage arrangement fee: This is an application fee charged by the lender for processing your application. They may also charge additional fees, for example legal fees and valuation costs. Deposit: Many lenders will expect a percentage of your property value to be paid up front by a cash deposit. This is typically between 5-10%, but it can be more. Stamp Duty: This is a government tax charged on the purchase of your property if it costs more than 125,000 (correct as at 08/2018). The exact percentage varies according to the value of your home. Legal Fees: You will be expected to appoint a solicitor to act on your behalf during the purchase. They will charge a fee for the work they carry out. Survey Fees: It is recommended that you have your own in independent structural survey carried out on the property. This is to ensure the property is structurally sound and your future investment is protected. Removal Costs: If you are buying an alternative property, you will have to pay all the removal fees. This can also include swapping any service providers from your old to your new home. 10. The next steps Once you are clear about the financial costs relating to owning your own home, you can proceed to the application stage by completing the application form (VRTB1). It is important that you complete all sections of the form. Applications with any missing or incomplete information will be returned, which will delay the purchase process. During the application Once you have submitted your application, we will only carry out repairs if there is a risk that the property may become uninhabitable, such as: supply of water, gas and electricity sanitary repairs, to include sinks, baths and toilets repairs to central or water heating. If you move away from or sublet the property your application will be withdrawn and you will not be able to buy it. If you fall into rent arrears we may withdraw your application. The information you provide must be up to date and accurate. 11. What next? Make sure you have provided all the information requested on the application form before sending it to us. We recommend you send any forms or documents by recorded delivery or hand deliver to ensure safe receipt. We are unable to account for missing applications forms which have been sent via normal postal services. We will confirm receipt of your application.
Your application will be dated on the day we receive all of the requested documentation. Delays in sending the information to us will result in a delay to your application date. If you would like to find out more please go to: The Government VRTB webpage https://midlands.righttobuy.gov.uk The Right to Buy agents website www.righttobuy.gov.uk/agent-service Citizens Advice Mortgage Advice Bureau Important information to note if you buy If you buy your home through the VRTB scheme and then decide to sell, we (Metropolitan) will have a 10 year right of first refusal to buy it back from the date of the sale. We would buy it back based on a contemporary market value, arrived at by a RICS valuer. If we decided not to exercise our right to buy back, you would be able to sell the property on the open market. You will not be allowed to sub-let your home for the first five years after you have purchased it. Any sub-let or sale within that five year period could mean you have to repay to us all or a proportion of the discount you receive. 12. And finally... If you are not eligible to buy through this scheme, or decide that this is not the right route to home ownership for you, then other ways of owning your home might be a better choice: Shared Ownership works on a part-buy, part-rent basis so your monthly housing costs are kept manageable and affordable. You will need savings to pay mortgage deposits and your legal costs but these are much lower than if you were buying a home outright. More information on shared ownership and home ownership is available here: www.helptobuy.gov.uk www.homebuyservice.co.uk www.metropolitansales.org.uk Open Market: You would have full responsibility for making all your own arrangements (mortgage, solicitors, valuation etc ).