Frequently Asked Questions (FAQs)
How much can I buy?
At the outset, the minimum share you can buy is 10% of the property value (there is no maximum). As time goes by you can purchase more of your property, thereby decreasing the amount of rent you have to pay. Gradually increasing your ownership percentage in this way is known as ‘staircasing’. You will buy your home on a shared ownership lease which for freehold properties will be for 999 years (the term of a “virtual freehold”). This lease sets out you and your family’s rights to occupation as well as your obligations as a home owner.
On the day of purchase the landlord's share (the part you did not buy) must be either 50% or at least £100,000 of unpurchased property value.
Can I buy any property?
Yes, provided that it is a freehold property.
Do I qualify if I already own a property?
Yes you do. The scheme is open to anyone looking to purchase a property, whether you are a first or next time buyer. You must not own any other properties or you must be selling them so that on completion, the property using Your Home is your main and only residence.
How much does Your Home cost?
Well, firstly there’s your deposit. This needs to be a minimum of 10% of the price of the property. Then there is the product fee (£1,200 for freehold properties). This will cover the cost of processing your application and the solicitor’s fees for heylo to buy the property and then sell you a share. You will need to pay for a RICS Standard Valuation Report as well as pay your solicitor to buy your share via the Your Home lease. Depending on the property you buy, you may also have to pay Stamp Duty Land Tax. All of these costs will be detailed for you throughout the process but we suggest that you have at least £3,500 set aside for costs.
Can I take out a personal loan to pay for costs or fund part of my deposit?
Yes, provided that this is unsecured, but you will need to tell us about this as part of your application. We need to see that you have the funds and also we need to take into account this and any other loan repayments in your affordability assessment so make sure you let us know that is how you want to pay and we will ask you for the relevant information.
Who organises the RICS Standard Valuation Report?
You will instruct an independent surveyor to go out to the property. The surveyor will need to send you and the Your Home team a copy of the report so you can read through it make sure you are happy with the condition and valuation of the property.
What happens if the property is less than I offered (down-valued)?
If this happens you have a choice, you can try and negotiate with the vendor to reduce the price or if you choose to abort the purchase, you would need to pay for a new RICS Standard Valuation Report on the next property.
Which solicitor should I use to buy my share?
We have a panel of solicitors for you to choose from. They have been specially selected because they offer great customer service, value for money and they understand Your Home and shared ownership very well. They will help to ensure that the buying process is a smooth and stress free process.
(It's always useful to understand from the estate agent whether the property is in a "chain" and if so what the chain is and timing expectations.)
If I change my mind at any time, can I withdraw from the process?
Yes, of course. Until exchange of contracts you are not legally bound to anything so you are free to change your mind. We would strongly recommend that you think about any reason you may not proceed before starting the process though as any fees you pay are non-refundable if you withdraw.
I want to buy my ex-partner out of my property, can I do that using Your Home?
Absolutely! This is a great way to use Your Home. Provided that you can afford the monthly rent payments and there is a minimum 10% equity value left in the property to act as your deposit, you would be able to repay the mortgage and any money you might owe your ex and stay in your home. After the sale to heylo and the share sale to you the property will be solely in your name.
What is staircasing?
Staircasing is when you increase the share that you own in your home. If you increase your share in the property, the amount of rent you pay is re-calculated and reduced accordingly.
What is a RICS Standard Valuation Report?
This is a market standard property valuation. It will tell you the construction type of the property as well as the valuation. Although the price of a RICS Standard Valuation Report will vary depending on the value of the property they typically cost around £200 – £500 with payment made at the point of instruction.
What are the Legal fees and associated costs?
You will need to instruct a solicitor to act on your behalf. You can select from our list of approved solicitors who have a thorough understanding of Your Home or choose your own solicitor.
Disbursements (third party costs) such as Land Registration fees, search fees etc. will be charged in addition to the solicitors fees – which if you choose one of our approved solicitors will be clearly agreed and fixed in advance. Your solicitor will also advise you on the cost of any Stamp Duty Land Tax payable.
What else will I need to pay in addition to my monthly shared ownership rent?
In addition to your rent, the Your Home lease will require payment of an annual management fee (currently £181.44 including VAT) as well as buildings insurance. Both of these are payable monthly in advance. When you complete your purchase, you will need to pay the rent, management fee and buildings insurance for the remainder of the month in which you complete, together with the following month. Your solicitor will let you know how much this will be.
Who is responsible for the upkeep of the property?
You will be responsible for the upkeep of your property. Your home may also be subject to third party service charge towards cleaning, lighting and maintenance of communal areas such as parking and shared gardens or un-adopted roadways. You will need to request and receive full information on the services and the estimated annual costs from the property vendor before you decide to buy as these costs will be included in the application process and affordability assessment.
What is the Your Home Lease?
This is a legal agreement that details what is expected of both the landlord and the leaseholder and has been created from a standard industry form but adapted to give you the benefits of Your Home.
Who has the repair obligations?
Like all other shared ownership leases, Your Home leases are full repairing leases. This means that as a leaseholder and home owner you are responsible for the costs of all repairs and maintenance both internally and externally.
Who is responsible for building and contents insurances?
Your Home leases specify that, unless agreed otherwise by heylo, the landlord will insure the building (through a bulk policy) leaving you to insure your contents. Given that heylo insures hundreds of properties you will benefit from a bulk discount making this policy very competitive compared to a policy you would purchase as an individual. The cost of this building insurance will be collected each month along with the rent.
What is RPI - Retail Price Index?
This is the official measure of the general level of inflation as reflected in the retail price of a basket of goods and services such as energy, food, gasoline (petrol), housing, household goods, traveling fare, etc. RPI is commonly computed on a monthly basis, but an annual rate is also published which serves as a yardstick for adjusting inflation-indexed salaries and wages, tax allowances, pensions and rents.
What is Stamp Duty Land Tax?
Stamp Duty Land Tax is generally payable on the purchase or transfer of property or land in the UK, including leasehold and shared ownership transactions, where the amount paid or value of the rent payable is above a certain threshold. These transactions must be notified to HM Revenue & Customs (HMRC) on a Stamp Duty Land Tax return within a certain time limit - even if no tax is due – however, your solicitor will be able to do this for you. You of course will need to pay any stamp duty at the point of purchase.
How do I work out my household income?
Household income is the combined gross income of all the members of a household who are of a legal working age and are going to be applicants for Your Home and ultimately own a share of the property. There is a maximum of 2 applicants. Individuals do not have to be related in any way to be considered members of the same household. Household income is an important measure used by heylo to assess affordability.
How do I buy a bigger share?
The Your Home lease sets out the process to allow you to buy a bigger share at any time. Like the initial purchase, an independent valuation will be undertaken and this will be used in a calculation specified in the lease to work out how much you will need to pay based on how big a share you wish to buy (click here for an example). As well as the cost of a valuation, buying a bigger share will also involve legal fees and may require a Stamp Duty Land Tax payment.
What if I want to move home?
The Your Home lease sets out the process to allow you to sell your property outright and your entitlement to the sale proceeds. Like the initial purchase, an independent valuation will be undertaken. When you sell outright the actual sale price will be used in a calculation specified in the lease to work out how much you will receive based on how big your initial share purchase was (click here for an example).
What if I pay the fee and the purchase does not go through?
Your application approval is valid for 60 days so you would need to find another property. After this you would need to refresh your application every 60 days until you find a property.
Is there a minimum additional amount if I want to buy a bigger share of my home?
You can buy more of Your Home at any time. There is no minimum amount, however, as you will be buying more property there will be associated costs (which could be the same as the initial costs if the additional share is funded with a mortgage) and therefore small additional % amounts may have disproportionately large costs.
Can I use Your Home again on my next home if I want to move?
Of course! Its available to any buyer or mover. Given Your Home is a lease relating to the property, this would be a new application for a lease on your next property.