About | Login | Register

Location: Home » Housing » Strategic Housing » Buying a Home

Buying a Home

The Low Cost Alternatives. There are three main types of low cost home ownership schemes in Bromsgrove District.

These are:

1.Housing Association Shared Ownership
2.Homebuy
3.Low Cost Home Ownership:
- The Bromsgrove District Council Scheme
- Forthcoming Housing Association Schemes

Housing Association Shared Ownership

Shared Ownership provides people who cannot afford to purchase a home outright, an opportunity to access the housing market ladder by part purchasing and part renting a home.

Shared Ownership properties are provided by Housing Associations and the schemes operate by the purchaser purchasing a share of the market value of the property and paying rent on the part that they do not own. In the future, further shares can be purchased (known as Staircasing) until the purchaser owns the property outright, or if the shared owner would like to move to a different property, their share of the property can be sold on. Some schemes have a condition limiting the total share that the occupier can purchase (e.g. to 80%)

Shared ownership means that the monthly mortgage and rent payments are more affordable than purchasing the property outright. In addition the shared owner will have a Capital stake in the home which may increase (or possibly decrease) in time depending on the housing market and property values.

Eligibility Criteria for Shared Ownership

The scheme is aimed at existing housing association tenants or applicants on the Council's housing register, held by Bromsgrove District Housing Trust, who wish to buy a property but have insufficient income or resources to buy a property outright.

Potential applicants are encouraged to register on the Council's General Housing Register (operated by Bromsgrove District Housing Trust) specifying their wish to be considered for any future Shared Ownership schemes by ticking the appropriate box on the application form. Contact Bromsgrove District Housing Trust on 01527 557 557 for an application form.

How Shared Ownership Works
The purchaser buys a share of the property for a sum representing a percentage of the full purchase price ie: 25%, 50% or 75%. The balance is owned by the housing association. The typical purchase share is 50%.

Rent is payable to the housing association for the share of the property which has not been purchased. For example, if a 25% share is purchased, then 75% of the rent charged for the whole property would be required. A minimum income of £15,000 per annum is currently necessary in order to be able to afford a shared ownership home.

Current Approximate Example	£	£
Cost of House	100,000	120,000
Cost of 50% Share	50,000	60,000
Typical Mortgage Cost	70 per week	74 per week
Typical Rent	35 per week	38 per week

Please note: The rent, but not the mortgage, is eligible for Housing Benefit subject to income. Figures vary depending on interest rates and mortgage terms.

Insurance, Maintenance and Repairs.

The Housing Association may hold the buildings insurance for the property and recharge the shared owner through the rent. If not the shared owner will need to take out their own buildings insurance as well as contents insurance. The shared owner will also be solely responsible for the maintenance of the property in the same way as if they owned the property outright.

Obtaining a Mortgage

A financial advisor and/or building society will be able to give advice regarding mortgages. The amount which the mortgage lender will lend will depend on income and other circumstances.

How much will it cost to purchase a shared ownership property?

The purchase costs are the same as if the property were being purchased outright, and consist of:

Legal fees of conveyance
Valuation and survey fees
Stamp Duty on the full value of the property if applicable.
An application fee and deposit for the mortgage lender

It is also worth keeping in mind that Shared Owners have to make the following regular payments:

Rent
Mortgage payment if you have a mortgage
Other domestic bills such as water, gas and electricity
Home contents and possibly buildings insurance

Moving Home

If the shared owner has 'staircased' and purchased further shares until they own the property outright then the property can be sold on the open market in the normal way.

If the shared owner wants to sell their share in the property they must first give the housing association the option to nominate a purchaser for the share. If the housing association does not wish to nominate a purchaser, then the shared owner can sell the property on the open market, through an estate agent.

The housing association will confirm whether they wish to nominate a purchaser, or if the purchaser is free to sell the property on the open market. If the housing association is nominating a purchaser, arrangements will be made for the property to be independently valued. The housing association then has to ensure the valuation is acceptable to the shared owner after which contracts will be drawn up and exchanged.

Purchasing Further Shares in the Property (Staircasing)

The shared owner will need to write to the housing association requesting to purchase a further share (or shares) in the property. Some housing associations may require a non refundable administration fee.

The housing association will arrange for the property to be valued, and if the valuation is acceptable, a specific time limit will be given in which to complete the purchase.

2. Homebuy

The Homebuy Scheme is for those who's income maybe too low to raise a mortgage to buy a suitable home for themselves. This scheme helps people to buy their own home with financial help from a housing association.

The housing association will provide 25% of the cost of the property in the form of a loan. This loan does not have to be repaid until the property is sold.

The other 75% of the purchase price must be provided by the purchaser through conventional mortgage or personal savings.

Applicants must not be in a position to be able to afford to buy a property without the help from Homebuy.

For more information contact: Home 2 Own on 0845-6585420

3. Low Cost Home Ownership

The Bromsgrove District Council Low Cost Scheme

Bromsgrove District Council's Low Cost Home Ownership Scheme is a part-ownership Scheme set up during 1989-1992 when the Council arranged for the building of 222 "Low Cost Homes" at various sites in the District.

These were sold at 70% of what was then their market value, and the Council retained a 30% share. The idea behind this was to enable people who could not afford the full price of a house in the District to take a first step on the housing ladder, at a price which they could afford

When the owners of these homes want to sell them, they must do so to someone else nominated by the Council at 70% of the current market value. This means there is a continuous supply of low cost homes available to new purchasers.

There are these Low Cost Homes?

They are in three areas in the town of Bromsgrove and in one area each in Hollywood and Alvechurch -

Drovers Way, Farmers Road and Shepherds Walk, Bromsgrove
Swaledale Close and Teeswater Close, Bromsgrove
Greenacres Road and Parkwood Road, Bromsgrove
Woodrush Drive, Hollywood
Crown Meadow and Glebe Road, Alvechurch

What sort of Homes are they?

They are a mixture of 2-bedroom and 3-bedroom houses. Most are semi-detached, although a few are in terraces of 3, 4 or 5 homes.

How to Apply

There is a waiting list of people interested in purchasing a low cost home. To be placed on the list an application form should be completed and sent to the Jayne Burton, Housing Performance and Monitoring Officer, Bromsgrove District Council, The Council House, Burcot Lane, Bromsgrove B60 1AA. The form is available on the website or by phoning the Strategic Housing Team on 01527 881288

There are two qualifications for joining the waiting list:

The applicant must be a resident of the Bromsgrove District Council area. If two people are making a joint application, then only one of them needs to be a resident.
The applicant must be a first time buyer, or must not have owned a home for at least two years.

How long will it take, before I get the chance to purchase a Low Cost Home?

This depends on how many of the existing owners want to sell their homes at any one time. It also depends on the area and size of home required. Generally, people who are prepared to purchase a home of any size and in any area are likely to wait for shorter periods than people with more particular requirements.

It is likely that the waiting time will be a number of months before a home becomes available under this scheme.

How are Nominations Made?

When one of the homes becomes available for sale, the Council works out the selling price with the owner and then writes to everyone on the waiting list for the area concerned. Applicants are given about 10 days to decide whether they want to express an interest in buying that particular home. At the end of this period the Council offers the opportunity to the person expressing an interest, who has the highest priority on the waiting list.

Priority on the waiting list means that people who are Council tenants or Housing Association tenants get the first opportunity to purchase, followed by everyone else in the order in which they applied to join the waiting list.

For the Hollywood and Alvechurch areas, people who live in those areas get priority over people from other areas. Personal circumstances, e.g. size of family, are not taken into account.

If the person who was nominated for the opportunity to purchase then decides not to go ahead, the property is then offered to the next person in priority order and so on.

Carrying out Improvements

The owners of these properties can carry out improvements providing that all the usual permissions, e.g. planning consent, are obtained. If the improvements increase the value of the home, when the property is sold, the increase in value directly attributable to these improvement are paid back to the owner. This is not always the same as the actual cost of those improvements - e.g. building a new patio may cost £1,000, but may have no significant impact on the value of the property.

Is it possible to purchase the Council's 30% share later on?

Yes, the only restriction is that the whole of the remaining share is purchased. There is no scheme under which the Council's share can be bought in stages (e.g. 10% at a time).

For further information contact:

Telephone Strategic Housing Team on 01527 881288 or e-mail strategic.housing@bromsgrove.gov.uk.

Forthcoming Housing Association Low Cost Schemes

Plans are being made for further low cost homes to be provided through Housing Associations (Registered Social Landlords) operating in the district.

It is envisaged that future schemes will operate in a similar way to the Bromsgrove District Council Scheme set out above. However eligible applicants will be selected for nomination from the Council's Housing Register. Potential applicants are therefore encouraged to register on the Council's General Housing Register (operated by Bromsgrove District Housing Trust) specifying their wish to be considered for any future Low Cost Housing schemes by ticking the appropriate box on the application form. Contact Bromsgrove District Housing Trust on 01527 557557.