Your guide to Voluntary Right to Buy Midlands Pilot Places for People 1
Places work when they work for everyone.
Contents Introduction 4 Voluntary Right to Buy Midlands Pilot 5 1 How to apply 6 2 Eligibility FAQs 7 3 Value and discount FAQs 9 4 Process and timescales 11 5 Cost of buying and owning a home 16 6 Can I sell, transfer or sublet my home after I have bought it? 17 7 What happens next? 18
Introduction The Voluntary Right to Buy pilot is a scheme where assured tenants of housing associations may have the chance to apply to buy their homes. If successful, the purchase price will be discounted to the same value as some tenants enjoy under the Statutory Right to Buy scheme. This Voluntary Right to Buy pilot will run for two years and will provide the opportunity for eligible general needs tenants across the Midlands pilot area to buy their homes. Because this is a pilot scheme there is a limited amount of funding available and not everyone who registers will be able to buy. Buying your home is a big decision for you and your family. The responsibilities, costs and financial commitments that ownership brings need to be thought about carefully, so you should always seek impartial advice before buying. 4
Voluntary Right to Buy Midlands Pilot Voluntary Right to Buy Midlands Pilot The Government announced, in the Autumn Budget 2017, the Voluntary Right to Buy Midlands Pilot. Eligible tenants may be able to buy their home with a discount of between 35% and 70% of the value of the property, up to a maximum of 80,900 (whichever figure is the lower). The discount is based on the length of time spent as a tenant of an eligible landlord. This booklet sets out the main information you need to get you started, the questions you should ask, how to take the next steps, and useful contacts for free, unbiased advice and information. This guidance and our Local Sales Policy explain that your ability to purchase your home under the Voluntary Right to Buy Midlands Pilot depends on a variety of factors. It is important that you do not apply for a mortgage, instruct solicitors or make any other financial commitments until we have confirmed that you may proceed with your purchase and we have sent you a formal offer to confirm the purchase price and your discount entitlement. You can access free information and advice from the following: The Right to Buy Agents A free, impartial source of information funded by the Government. Tel: 0300 123 0913 https://righttobuy.gov.uk/agent-service/ enquiry@righttobuyagent.org.uk The Money Advice Service For budgeting and financial advice. Tel: 0800 138 7777 www.moneyadviceservice.org.uk/en Citizens Advice For legal advice. www.citizensadvice.org.uk The Government s Voluntary Right to Buy webpage https://midlands.righttobuy.gov.uk which is navigable from https://righttobuy.gov.uk/am-i-eligible/ housing-association-tenants/ 5
Voluntary Right to Buy Midlands Pilot 1. How to apply How do I register for the Voluntary Right to Buy Midlands Pilot? First, check you meet the Government s eligibility criteria by checking the information outlined in section 2 of this guide. Visit https://midlands.righttobuy.gov.uk/ to register to take part in the ballot, you will receive email confirmation that your registration has been received. The ballot will close at midnight at the end of Sunday 16 September, after which the Unique Reference Numbers (URNs) will be assigned by the Government and emailed to successful tenants. A limited number of Unique Reference Numbers will be available and not every applicant will be able to receive one. Please note that, even if you do receive a Unique Reference Number, there is no guarantee you will be able to buy your home. This depends on the eligibility of you and your home. Applicants will be chosen at random by ballot after the gateway has closed. The ballot has been chosen to ensure fair distribution of the limited number of Unique Reference Numbers. We cannot answer any other questions about how these Unique Reference Numbers will be allocated. I was unsuccessful in the ballot. Can I appeal? Unfortunately not. The number of sales in the pilot is limited and successful applicants for Unique Reference Numbers were selected by a strictly random ballot. Can I complete an application? Only tenants who have been allocated a Unique Reference Number by the Government may apply for the Pilot. If you receive a Unique Reference Number, you will need to e-mail the Property Sales Team at: Property.Sales@placesforpeople.co.uk and provide us with your URN, your full name and full address including postcode. We will then contact you and let you know how to proceed with an application.you will be given 4 weeks to submit a completed and signed application, and provide all the required supporting documentation. If you do not submit a fully completed application with the required documentation the Unique Reference Number will expire and you will not be able to apply. Important The allocation of a Unique Reference Number by the Government does not indicate that you are eligible for the Pilot, or that your property is included in the Pilot. If you do not receive a Unique Reference Number, you are not eligible to apply to purchase your home under the Voluntary Right to Buy Midlands Pilot. I missed the window for entering the ballot for URNs. Is there anything I can do? There are no immediate plans to reopen the ballot. However, any decision by Government on this would depend on the level of demand. You can sign up for more information on the Government s website at https://righttobuy.gov.uk/am-i-eligible/housingassociation-tenants/, and you will receive any new information. Places for People 6
2. Eligibility FAQs Am I eligible? You may be eligible for the Voluntary Right to Buy Midlands Pilot if you meet ALL of the following criteria: The property you live in is your main home and you have lived in it for at least 12 months; You have been a public sector tenant of social or affordable housing with an eligible landlord, for at least three years. This period does not have to be consecutive. You hold an un-demoted secure tenancy or an assured tenancy (subject to exclusions listed in the Local Sales Policy). You have the right to reside in the UK, and can demonstrate that you have the correct immigration status; You live in a general needs property; You have been allocated a Unique Reference Number from the Government (see section 1). However, you will not be eligible for the Pilot if any of the following apply to you: You have the Statutory Right to Buy or the Preserved Right to Buy; Your home is not situated in one of the Midland local authorities determined by the Government in which the Pilot is operating; You do not have a valid Unique Reference Number from the Government s digital gateway at the time of application; You have any rent arrears (unless these are paid within 7 days of submitting an application for the Voluntary Right to Buy Midlands Pilot); You hold an assured short hold tenancy (other than a Localism Act fixed term tenancy), a contractual (nonassured, non-secure) tenancy or are a licensee; You have a fixed term tenancy of less than two years, or a periodic assured shorthold tenancy (including a starter tenancy which has not converted); You do not have the right to reside in the UK and cannot demonstrate that you have the correct immigration status; You are currently subject to the mortgage rescue scheme. You may become eligible if you move to a new qualifying property or are granted a new tenancy; You are residents of almshouses or co-operative housing associations; You, or any joint applicants, are subject to bankruptcy proceedings or unfulfilled credit arrangements; You have committed anti-social behaviour as defined in Paragraph 11 of Schedule 11 to the Anti-Social Behaviour, Crime and Policing Act 2014 and we have initiated legal proceedings as a result of this. You may become eligible if such legal proceedings were withdrawn or discontinued; You are currently subject to legal proceedings, for example if injunction proceedings have been issued or a Notice of Seeking Possession (NOSP) has been served. You may become eligible if such legal proceedings are withdrawn or discontinued, if we fail to send papers to the court for issue within six months of expiry of the NOSP, or we lose the case in court (including following any appeal); You are subject to legal proceedings at any point between application and completion. You may become eligible if such legal proceedings were withdrawn or discontinued; You already own a property at the point of application, and will not end your ownership on or before completion of the Voluntary Right to Buy purchase; You hold an assured fixed term tenancy where the original term was 21 years or more (i.e. a long term tenancy); You occupy only a room, or rooms, in a shared house or flat, even if the terms of the occupancy amount to an assured tenancy; You are a shared ownership tenant. Continued overleaf 7
2. Eligibility FAQs (cont) Is my property included in the Pilot? Because this is a voluntary scheme, some categories of properties are excluded from the Pilot. These categories are listed here Only a few housing categories have been excluded, in order to help our tenants realise their home ownership aspirations and to meet the Government s objective of providing tenants of registered providers the opportunity to purchase their home with a discount. Where tenants are unable to purchase the home they live in because the property is excluded under our Policy, we will offer tenants an option to transfer their discount entitlement under our Portability Policy. We aim to identify if your property is excluded from the Pilot within one month of receiving a formal application. However, some exclusions can only be identified once the property has been valued or after our solicitor has investigated any legal matters affecting the property. What does it mean if my property is excluded from the Pilot? If your property is excluded from the Pilot we will ask you if you want to transfer or port your discount to another property under our Portability Policy. If you confirm you wish to port your discount we will make one reasonable offer from our qualifying empty properties in the area. Where possible we will try to match the property we offer to your requirements. To qualify to share in a Voluntary Right to Buy purchase, the family member must: Be aged 18 or over; and Demonstrate that the property they wish to share the purchase of is their main home; Evidence that the property they wish to buy has been their residence for at least 12 months prior to the date of application for Voluntary Right to Buy; Not own another property, or sell their other property before the Voluntary Right to Buy purchase. Can my family buy my home? Your family can help you fund the purchase, but unless they meet the criteria above, they will not be able to share the purchase. Can I add or remove purchasers during the purchase? If any of the applicants who are not named tenants change at any point once the signed application has been submitted, the application will be rendered void. In the event of the death of a sole named tenant, subject to the consent of Homes England, the application may continue provided that the statutory successor to the tenancy is one of the other named applicants. Joint applications where any applicant is ineligible will be voided. If a suitable alternative property cannot be found, or if a mortgage cannot be secured within 3 months, your application for the Voluntary Right to Buy Midlands Pilot will be cancelled. Can I share the purchase with other people? Yes, you may share your purchase with up to three qualifying family members as defined below: Your husband, wife or civil partner, or someone who lives with you as your husband, wife or civil partner. Your parent, grandparent, child, stepchild, brother, sister, uncle, aunt, nephew or niece. A parent, grandparent, child, stepchild, brother, sister, uncle, aunt, nephew or niece of your husband, wife or civil partner. 8
3. Value and discount FAQs What is the value of my home? We cannot tell you the value of your home until we obtain a valuation. In the meantime you can make your own enquiries by checking recent sales prices for comparable properties on websites which record sale price information, or look at estate agent adverts for homes like your own. Please refer to section 4 which confirms the stage at which we will obtain a valuation. When we are ready to instruct a valuation, we will ask you to select a surveyor from a short-list of local professional RICS (Royal Institution of Chartered Surveyors) certified surveyors. We will pay the cost of the valuation report. The surveyor will visit your home to carry out an inspection. We will give the surveyor your name, address and telephone number in order to arrange a convenient appointment with you. If either party wishes to appeal the valuation, a second valuation will be commissioned from a different surveyor on our list of local surveyors. The party that disputes the valuation will bear the cost of the second valuation. The second valuation will be binding on both parties. I have made improvements to my home, will this affect its value? Only improvements such as a new bathroom, kitchen or extension will be considered a home improvement. You must provide us with evidence that you obtained our consent to carry out the improvements in order for them to be considered by the surveyor. It will be decided during the valuation process whether your improvements have had an impact on the property value, possibly resulting in the home improvement value being disregarded from the valuation used to determine the purchase price. Important General decorations and maintenance are not classed as improvements. How much discount will I receive? The minimum discount for the purchase of a house is 35% of the value of the property after three years of qualifying tenancy. After five years of tenancy, this increases by 1% for each additional year of tenancy. The minimum discount for the purchase of a flat is 50% of the value of the property after three years of qualifying tenancy. After five years tenancy, this increases by 2% for each additional year of tenancy. The maximum discount for houses and flats is 70% or 80,900 (whichever is the lower). For a rough guide to help you work out the discount you may be eligible for visit https://righttobuy.gov.uk/ right-to-buy-calculator/ Continued overleaf 9
3. Value and discount FAQs (cont) The below table shows the discounts available for each qualifying period, both for houses and flats, and also gives some examples of the discount a tenant could receive on a home worth 120,000: Qualifying period (years) Houses Discount (%) Example discount on a home worth 120,000 Flats Discount (%) 3-5 35% 42,000 50% 60,000 6 36% 43,200 52% 62,400 7 37% 44,400 54% 64,800 8 38% 45,600 56% 67,200 9 39% 46,800 58% 69,600 10 40% 48,000 60% 72,000 15 45% 54,000 70% 80,900 20 50% 60,000 70% 80,900 25 55% 66,000 70% 80,900 30 60% 72,000 70% 80,900 35 65% 78,000 70% 80,900 40 70% 80,900 70% 80,900 Example discount on a home worth 120,000 For each complete year of confirmed tenancy, the tenant is entitled to receive a discount based on a percentage of the open market value of the property. The total periods of qualifying tenancy are added together (years, months, days) and the discount is calculated on the total years. The monetary value of this percentage is deducted from the market valuation of the property. The maximum discount will be reviewed annually and increased if appropriate in line with the Consumer Price Index level of inflation (CPI). If a tenant (or if there is more than one tenant purchasing, one of the tenants) has previously received a discount under Right to Buy, Preserved Right to Buy or Right to Acquire, the monetary value of the discount is reduced by the monetary value of the discount previously received. Can I use rent I ve paid as a discount? No. The discount you may be entitled to will be calculated as above. You will not receive any further deductions in respect of rent you have paid for your home. How do I fund the purchase of my home? We have provided useful information in section 5 regarding mortgages and the costs of owning your home. If you require a mortgage to purchase your home, your mortgage lender must be registered with the Financial Conduct Authority (FCA) https://www.fca.org.uk/ and authorised to enter into regulated mortgage contracts. The mortgage advance is to be used solely for the purchase of the property and the advance must not be more than the discounted purchase price. If you are funding the purchase from savings, we will require evidence to verify the source of the funding. If you are buying your home with the help of a loan or contribution from a family member or another individual, we will need proof of the money being transferred into your UK bank account in addition to information to verify the source of funding. We will comply with our Anti-Money Laundering and Fraud Policy when administering applications for the Voluntary Right to Buy Midlands Pilot. 10
4. Process and timescales How long does the process take? We will clearly confirm these timescales throughout the process. The onus is on you to progress your application within these timescales. Failure to comply with these timescales will result in the withdrawal of your application or the expiry of the funding allocated to you by the Government. Please note that applications withdrawn by us will not be re-opened. The following timescales assume that a tenant can purchase the home they currently live in Launch Date Tenant registers interest on Government portal. Go Live Date One month after launch Government allocate Unique Reference Numbers to tenants eligible to apply for Voluntary Right to Buy and inform eligible tenants and applicable landlords. STAGE 1 Application Form within 4 weeks Tenant submits a fully completed and signed application with all documentation and evidence requested to Places for People Homes (Landlord). STAGE 2 Eligibility Checks - within 4 weeks (full history with current Landlord) or within 8 weeks (history includes other Landlords) Landlord carries out applicant eligibility and initial property checks this includes checks to verify right to reside in the UK, fraud checks and a home visit If the application/evidence/home visit has been verified and approved, the Landlord will ask the Tenant to pay the administration fee and select their choice of valuer from list provided. STAGE 3 Pay administration fee and select valuer within 4 weeks Tenant pays 250.00 administration fee to the Landlord and confirms choice of valuer. STAGE 4 Valuation and legal Due Diligence within 12 weeks Landlord instructs a valuation and carries out legal due diligence to identify any property exclusions under this policy. For included properties the Landlord will request permission to sell from Homes England. If Homes England provide approval to sell, the Landlord will issue a formal offer to the Tenant to confirm the value, purchase price and discount entitlement. STAGE 5 Formal offer notice accepted by tenant within 4 weeks Tenant confirms their intention to proceed with the purchase and provides solicitor s details to the Landlord. STAGE 6 Conveyancing and completion of sale within 12 weeks The Tenant, Landlord and solicitors for both sides progress conveyancing and complete sale. 11
4. Process and timescales (cont) All of the above timescales are provided by the Government within their Midlands Pilot Guidance for Housing Associations. We will aim to administer applications in line with these timescales. Failure by you to comply with the tenant s timescales, or if you do not facilitate the home visit (stage 2) or allow access to the valuer (stage 4) within a reasonable timescale set by us, will result in the withdrawal of your application or the expiry of the funding allocated to you by the Government. Applications withdrawn by us will not be re-opened. What supporting documents will I be asked to provide? The onus is on you as the buyer to demonstrate that you meet all the eligibility criteria and that you are entitled to the discount you are claiming. The documents we will ask for will include: Documents to confirm your identification and right to reside in the UK Certificates to confirm your relationship with family members sharing the purchase, including Birth Certificates and Marriage Certificates Certificates to correct any out of date tenancy information, such as a Marriage Certificate Suitable evidence of former tenancies Will I be visited by someone from Places for People? Yes, we will arrange a home visit and it is compulsory for all purchasers to be present at the visit. At the home visit we will check documentation to confirm identification and the right to reside in the UK for all purchasers. Do I have to pay an application fee? Yes, we will ask you to pay an application fee of 250 before we value your home. You must make the payment within 4 weeks of request. The payment will be refunded to you if you complete the purchase of your home, or if we close your application because we identify that your property is excluded from the Pilot. The payment will not be refunded if you decide not to proceed with the purchase or if we decline your application, for example because you failed to meet the timescales outlined in this section. Will repairs still be carried out to my home? During the application process we will only carry out essential repairs to comply with our legal obligations as a landlord. No planned improvement works will be undertaken to a property once an application has been received. If you are claiming former tenancies with other landlords, we will ask you to obtain a signed letter from your former landlord to confirm details of your former tenancy. If your former landlord confirms that they have not retained records and cannot therefore provide this information, we will let you know what information we will consider as an alternative. Please refer to section 5 which provides important information about repairs and the cost of maintaining your home following the purchase. Continued overleaf 12
4. Process and timescales (cont) I have been approached by a person or company offering to help me buy my home, what should I be aware of? If you are approached by a person or company offering to help you buy your home, check out what s in it for them and talk to us before signing up to any deal. We are aware that sometimes tenants are asked to pay a lot of money for things that landlords will do free of charge. Some companies offer tenants money up front in a deal under which the company ends up owning the property this is known as a deferred resale agreement. This is good for the company, which can charge a higher rent than your landlord could when it let the property. But it is not always good for tenants, because the money they get may not be enough to buy another home. Some tenants have found themselves homeless after agreeing to such deals. Also, if you enter into a deferred resale agreement, you may have to repay your Voluntary Right to Buy discount. Will I need a solicitor? Yes. If we send you a formal offer, you must then instruct a solicitor to act on your behalf in respect of your purchase. We will also instruct a solicitor and we will share your name, address and information, relevant to your application to the sale to the solicitor delivering legal services on our behalf in respect of your Voluntary Right to Buy application. It is important that you ask your solicitor to thoroughly explain to you the content and implications of the legal documents you will enter into upon the purchase. These will include a Lease or a Transfer and a Legal Charge. The Legal Charge protects the obligation on you to repay discount should you sell or sub-let your home within 5 years following your purchase. The Charge will be registered against the legal title to your home. The Lease or Transfer contain the terms of your purchase and outline your obligations and our obligations in respect of the property, for example in respect of repairs, maintenance and service charges. If you purchase a freehold house you will enter into a Transfer. You will be responsible for all repairs and maintenance to your home. You may continue to pay a service charge to us for the provision of communal services and our costs in managing these services. If you purchase a flat you will enter into a Lease. The Lease will outline rights and responsibilities for the landlord and the leaseholder. The landlord will generally be responsible for the repair and maintenance of the building, usually the structure and outside of your flat and the rest of the building. This includes routine repairs and maintenance, and also major maintenance and refurbishment works (for example, repairing the roof or replacing windows), which can be very expensive. Your landlord may provide services such as communal lighting and cleaning staircases. You will have to pay a reasonable share of the costs for these works and services. Your share is determined by the number of flats in the block. You will also usually have to pay a charge towards the landlord s costs of managing the block. 13
5. Costs of buying and owning a home Buying your home is a major financial commitment. Apart from paying for it (upfront, in cash or with a loan), you will then have to maintain it and pay other ongoing costs. Before borrowing money to buy your home, take time to consider all the costs involved and the choices available. You should get independent financial advice to help you decide whether buying your home is the best option for you. The Money Advice Service is a free, impartial service, set up by the Government, to help people make informed choices about managing their money. You can get useful information from their website, www.moneyadviceservice.org.uk, or you can telephone them on 0800 138 7777. Mortgage Unless you are going to buy your home with cash, you will need a mortgage. There are various kinds of mortgage which your bank or building society can tell you about. An independent financial advisor may also be able to help or you could contact the Mortgage Advice Bureau www.mortgageadvicebureau.com The process you will go through to obtain a mortgage is regulated by the Financial Conduct Authority (FCA). You can use the following link to check that the bank, building society or mortgage broker you want to talk to is regulated by the FCA www.fca.org.uk You will have to repay the mortgage, plus interest, by instalments (usually monthly). Usually mortgages have to be repaid over a period of 25 years, but the period can be longer or shorter. Flexible mortgages are available which allow you to vary your payments (subject to rules set by the lender). The lender may not be prepared to lend you the full amount that you need to purchase your home. If so, you will have to pay the rest from your savings. If you sell your home later, you can use the money from that sale to pay off the rest of your mortgage. But remember that the value of homes can go down as well as up and in some cases people find themselves in negative equity. This is when the mortgage on your home is larger than the amount for which you are able to sell it. Think about what would happen if you buy your home with other people, such as family, and their circumstances change You may choose to get advice from an independent financial adviser or mortgage broker. Costs vary and may be a set fee or percentage of the loan. Make absolutely sure that you understand what any deal means for you before signing. In particular: Do you fully understand the terms and conditions? What is the interest rate? And what happens to your mortgage payments when the interest rate changes for example, does your payment change when your mortgage interest deal runs out? What happens if you miss any repayments? What would it cost to repay the loan early and does the deal let you do that? What are the fees for setting up your mortgage or loan, e.g. arrangement and valuation fees? Survey You may want to get an independent survey done. This will highlight any problems (such as repairs) you ll need to know about before you buy. Costs can vary depending on the type of survey you select. You could consider one of these surveys: RICS Home Buyers Survey and Valuation This is a report and valuation in a standardised format, to tell the buyer of all significant defects, but not minor ones. It is likely to be adequate for most properties and provides a guide to value. It is likely to cost around 250-600. A Building Survey This involves a detailed examination of all the visible parts of the property. It is a good idea to have such a survey done if the property is old, or obviously in need of repair, or if you are considering making alterations. The cost of this may start at about 400, but it could be considerably more, and may not be available if your home is a flat. You can get more information about both of these from the Royal Institute of Chartered Surveyors (RICS) at www.rics.org/usefulguides or contact local surveyors. Your lender may be able to arrange for its valuer to carry out the survey, which could save you paying for a separate valuation. Continued overleaf Important Your home may be repossessed if you do not keep up repayments on your mortgage. 14
5. Costs of buying and owning a home (cont) Legal fees You will need to hire a solicitor or other licensed conveyancer for the legal aspects of your purchase (searches, land registry fees, deeds, etc.). Costs can vary, typically 500 to 750 and upwards. Stamp duty This is a one-off tax you pay when you buy a property. The amount is based on a percentage of the purchase price and varies according to the property value. Stamp duty does not apply to properties under a certain value (currently 125,000). Information on Stamp Duty can be obtained from: https://www.gov.uk/government/publications/ratesand-allowances-stamp-duty-land-tax. Other regular costs of home ownership If you buy your home, you will take on some ongoing costs and responsibilities that you might not have had as a tenant. Maintenance and repairs If you buy a house, we will no longer organise repairs to your home. You will need to organise and pay for these yourself. This could include electrical and plumbing jobs through to more expensive repairs such as roof replacement. If you buy a flat, your lease will confirm your repair obligations and your landlord s obligations too. Generally your landlord will be responsible to repair and maintain external and communal areas of your building and you will be responsible for the interior of your flat and any services which exclusively serve your individual flat. You will pay a portion of the landlord s costs for repairs, maintenance and refurbishment which the landlord carries out in line with your lease, these costs can be substantial. It s a good idea to set aside some money each month for maintenance and repairs. Be aware that you may need permission for some changes (such as planning permission for an extension) so check before you get started. Service charges Your share of the landlord s costs is known as a service charge. You may have to pay service charges towards costs of providing communal services to your home. If you purchase a flat, as explained above, you will have to pay a proportion of the landlord s cost of repairing and maintaining your building in line with the terms of your lease. This may include major maintenance and refurbishment works (for example, repairing the roof or replacing windows), which can be very expensive. Water charges You may pay water charges as part of your rent. But if you buy your home, you will have to pay these separately to the water services company. So to compare the weekly costs of buying with those of renting, you must deduct your landlord s charges for water from your rent. Insurance You will need to consider taking out insurance cover for your home and mortgage. There are four main types: Buildings insurance. This is essential. It is needed to cover the full cost of rebuilding your home if it were to be destroyed by fire or some other incident. In the case of flats, this insurance is often arranged for the whole block by the landlord, in which case the landlord will expect you to contribute towards the cost of the insurance. If you need a mortgage to help buy your home, the lender will insist that you have buildings insurance. Contents insurance. As well as buildings insurance, you should insure the contents of your home against theft and other risks. Life assurance. This may be needed to pay off your mortgage if you die before the end of the mortgage period. It means that your family is not left with the mortgage debt. Income protection insurance. You need to think seriously about how you would meet your mortgage repayments if you lost your income, say through unemployment or ill-health. Income protection products such as mortgage payment protection insurance may give you the security that you need. There are various insurance policies which offer cover against these risks. The terms, level of cover, and costs vary. You should therefore shop around for policies that best suit your needs. Continued overleaf 15
5. Costs of buying and owning a home (cont) Working out the costs Being a homeowner can bring many benefits, but it also brings important responsibilities. Use this section to help you work out the costs, benefits and drawbacks of home ownership for you. Fill out the table below to help you work out your current monthly outgoings as a tenant and compare that with the costs of being a homeowner. When working out what you can afford, it s important to put in all your outgoings such as food, clothes, utility bills, phone and car. One-off costs when you buy (see page 13 for details) Legal fees Stamp Duty Survey Fees Other costs Total Income Now (tenant) Homeowner Wages Housing benefit Other income Total Ongoing costs (monthly) Now (tenant) Homeowner Mortgage or loan payments Rent Council tax Utility bills (water, electric, gas, telephone, etc) Insurance (buildings and content) Life assurance and illness cover (if applicable) Internal upkeep and maintenance (repairs to heating system, DIY etc, if applcable) Major repairs or improvements (if applicable) Service charges and ground rent (if applicable) Other costs (living expenses, such as food, going out, clothes) Total Now (tenant) Homeowner Total monthly income Less monthly outgoings Your money left over each month 16
6. Can I sell, transfer or sublet my home after I have bought it? If you sell, transfer or sublet the property within five years following completion of your purchase you will be required to pay back the discount as follows: 100% of the discount repaid in the first year. 80% of the discount repaid in the second year. 60% of the discount repaid in the third year. 40% of the discount repaid in the fourth year. 20% of the discount repaid in the fifth year. To calculate the discount repayable upon sale, transfer or subletting, the percentage discount which was given on the VRtB purchase is applied to the market value of the property at the time of the sale, transfer or subletting. This sum reduces each full year following the VRtB purchase by the percentages outlined above. For example, a property valued at 120,000 and sold under VRtB with a discount of 40% ( 48,000) and which is valued at 160,000 at the time of the sale, transfer or subletting would give rise to a repayment of 64,000 (40% of the current value) if sold within the first year following the VRtB purchase. This reduces each year thereafter as illustrated below: The amount of discount to be repaid if the property is sold, transferred or sublet within five years of purchase will be a percentage of the open market value of the property, disregarding the value of any improvements. The Group will require a RICS open market valuation to determine the value of the property, the cost of the valuation is payable by the purchaser(s) of the property. Repayment is triggered by the date at which the purchaser enters into an agreement to sell on the property. Therefore, if the tenant signs an agreement with a third party to sell the property to them after a period of time (for example, in return for funding to make the initial purchase), the discount is repayable from the date of that agreement not the date of onward sale (a deferred sale ). If you wish to sell, transfer or otherwise dispose of your property within 10 years following your purchase, you will have to offer it back to us at full market value. If we do not wish to buy the property back we can nominate another registered provider to carry out the purchase. If we do not accept your offer within 8 weeks, you will be free to sell the property on the open market. Year following VRtB purchase (%) Discount repayable ( ) Discount repayable 1 100% 64,000 2 80% 51,200 3 60% 38,400 4 40% 25,600 5 20% 12,800 17
7. What happens next? If you wish to register to take part in the ballot visit https://midlands.righttobuy.gov.uk/. The ballot will be open until midnight at the end of Sunday 16 September, after which the Unique Reference Numbers (URNs) will be assigned by the Government and emailed to successful tenants. If you receive a Unique Reference Number you will need to e-mail the Property Sales Team at: Property.Sales@placesforpeople.co.uk and provide us with your URN, your full name and full address including postcode. We will then contact you and let you know how to proceed with an application. You will be given 4 weeks to submit a completed and signed application, and provide all the required supporting documentation. Please refer to the timescales and process outlined in section 4 of this guide. Before you register please note the following: Not all tenants can buy their home under the Voluntary Right to Buy Midlands Pilot. Funding for the scheme is limited, to apply you must be allocated a Unique Reference Number by the Government. Even if you receive a Unique Reference Number, we may not be able to sell you your property. The Government has set eligibility criteria and we have excluded a small number of categories of homes from the Pilot. If your home is excluded under our Local Sales Policy you will be offered the opportunity to port your discount to an empty void home. You will be visited by a member of staff from Places for People. All named purchasers must attend the appointment and must have all documentation requested available at the visit. Think carefully about if and who you apply to share your home with. Make sure they are eligible as outlined in this guidance. You cannot add or remove family members after you have submitted your application, if you do your application will be rendered void. If you apply to share your purchase with an applicant who is not eligible, your application will be rendered void. If your application is accepted you will be expected to proceed quickly. If you do not meet the set timescales, your application will be closed. Remember Do not make a mortgage application, instruct solicitors or make any other financial commitments until you have received an offer letter from us which confirms the value of your home and the discount you are entitled to. These commitments will be at your own risk. Your application is at all times subject to contract. Important You can find a copy of our full local sales policy here. You will need to pay a 250 administration fee during the process. This is refunded if you complete your purchase, or we are unable to sell your property to you, but will not be refunded if you decide not to go ahead after applying. Places for People 18
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