Readers put their property questions to our guest panel of experts: solicitors, mortgage advisers and property gurus.
THIS MONTH’S PANEL OF EXPERTS:
- Jane Williams, Head of Sales, Southern Housing New Homes
- Mike Luthra, Marketing & Progression, Octavia
- Lisa Moran, Sales and Marketing Director, Sovereign Network Homes
Navigating the Homebuying Process
I am a first time buyer and I have a lot of questions, which I hope you might be able to answer. – Jonathan Ireland, Croydon
Answers by: Jane Williams
Q: I’ve reserved a home, but there’s a delay in the handover date. What’s going on?
A: Owning your first home is a thrilling journey, but it can come with a few hiccups and some jargon that might be new to you. Let’s simplify things and address those potential bumps in the road.
While not ideal, handover delays in newly built homes are relatively common. Various factors can cause these delays – waiting for utility connections, material hold ups, or procedural steps in registration and sign off. Rest assured, these are temporary and are often addressed promptly. We’re on it, and we’ll keep you informed every step of the way.
Q: How will this delay impact my mortgage?
A: Great question. First, review your mortgage offer to ensure it’s still valid. If its expiration is near, consult your independent financial adviser immediately. Many lenders will agree to extend a mortgage offer once. But it’s essential to address it promptly.
Q: I’m currently renting. Should I end my tenancy now?
A: Navigating notice periods can be tricky. Here’s a golden rule: Never end a tenancy without a confirmed completion date. You could risk not having a place to stay if your new home isn’t ready. Remember, some notice periods can stretch up to two months, potentially overlapping with your new home’s rent or mortgage payments. Always ensure you have adequate funds to cover both. And a pro tip? Engage in open communication with your landlord. They might even agree to a shorter notice period if you approach the situation delicately.
Q: I’ve heard of “Practical Completion” and “Handover”. Are they the same thing?
A: They’re closely related but distinct. Practical Completion signifies that the homes are structurally ready, even though some warranty certificates might still be pending. On the other hand, Handover is the ceremonial baton pass. It’s when the developer transfers the legal reins of the property to the housing provider, and we’re all set to initiate the sale. Once we reach this stage, you’ll receive a notice to finalise your purchase. If you’ve already exchanged contracts, this is typically a 10 working day notice.
Starting a new chapter as a homeowner can be both exhilarating and overwhelming. But remember, at Southern Housing New Homes, we’re here to support you, ensuring you are well informed every step of the way and that your journey is as smooth as possible.
How do I get on the property ladder?
Q: I’m currently renting in Southall, but I’d love the chance to buy my own home. I can’t afford a property nearby as the housing market is so expensive, and I’ve only been able to save a small deposit of £4,500 due to my high monthly rental costs. I work in central London and must be in the office twice a week. I’m starting to worry that I’ll never be able to get on to the property ladder. What options do I have available to me? – Kiran Patel, Southall
Answers by: Lisa Moran
A: While London is, of course, an excellent place to live and work, the house prices certainly reflect that. The good news is that there are options available to help you get on the property ladder – one of which is shared ownership, a Government backed scheme that allows you to buy a share of your home, typically 25% to 75%, and pay a reduced rent on the remaining share. One of the main advantages is that you’ll only need a deposit that is 5% of the value of your share. For example, buyers at Horlicks Quarter, our development in Slough, can take advantage of deposits from as low as £3,563*.
Commutable towns in the home counties such as Reading and Slough also provide an attractive proposition at an affordable price. Slough, for instance, is undergoing a multi million pound investment plan, bringing a wide range of shops, leisure attractions, and facilities to the town. It’s also the perfect base for office day commutes, with the quickest train services to central London taking just 20 minutes.
Plus, monthly costs to own a shared ownership apartment at Horlicks Quarter start from approximately £971 for a one bedroom and £1,276 for a two bedroom, compared to £1,760 and £2,000 respectively to rent similar sized properties in Southall**.
If you’d like to find out more about shared ownership, the Sovereign Living website has plenty of useful information, guides, and stories from our previous shared owners to help you unlock your homebuying potential.
All the best finding your new home.
What are the options?
Q: What affordable housing options are available in London for homebuyers since Help to Buy is no longer an option? We are currently privately renting, and our rent has gone up substantially over the past year. We want to ideally move out of our rented accommodation, but with Help to Buy no longer available we are unsure as to what to do. Are there any other affordable options we should consider? My partner and I are on moderate incomes with a combined salary of £55,400. We have a good deposit of around £20,000. We are paying £1,680 a month to rent a one bedroom apartment in Wandsworth and want to start a family soon, so want something that has at least two bedrooms. Any advice would be helpful. – Victoria Haynes, Wandsworth
Answers by: Mike Luthra
A: I completely understand your situation. Finding affordable housing in London can be quite a daunting task, especially with rising rents. However, there are some options you can explore. One option is shared ownership, a Government funded, low cost homeownership programme that is designed to help individuals who cannot afford to buy on the open market.
Shared ownership enables you to buy a share of a property, usually from 25% to 75%, while also paying rent on the portion of the property that you do not own. You’ll need a deposit of 5% to 10% of the share you are purchasing. As your circumstances evolve, you have the flexibility to acquire more shares in your home to match your income and changing life circumstances.
One key benefit is that the rent you pay on the unowned part of your home is heavily subsidised, so it is below the market rent. Many local authorities also collaborate with housing providers to ensure that a certain number of homes in new schemes remain affordable for local families with incomes up to a set limit.
For instance, look at Octavia’s Earlsfield Green development of new apartments and houses in SW18, near your preferred area. By purchasing a 25% share, you could potentially have monthly costs as low as £1,216 for a two bedroom apartment. This includes your mortgage, service charge, and rent on the unowned share. Several homes here have been allocated to accommodate local families with incomes of up to £56,200.
The Earlsfield Green scheme launched in November, with prices for two bedroom apartments starting from £140,625 for a 25% share. To check eligibility and availability, call Octavia on 020 8354 5500, email sales@octavia.org.uk, or visit octavialiving.org.uk.
It’s worth noting that shared ownership works well for many people entering the property market, but it may not be the right choice for everyone. I highly recommend consulting with an independent mortgage adviser and seeking legal advice to help you decide if it is the right path for you.
For more information about shared ownership and other housing options, you can visit the official Government website gov.uk/affordable-home-ownership-schemes, or you can also find valuable information on sharetobuy.com.
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