Homebuy

Properties purchased under the Homebuy or Low Cost Ownership schemes are owned outright by the purchaser. The purchaser pays only a percentage of the total purchase price (usually 70%). Hafod provide the remainder of the funding (known as an equity loan) and own an equity share in the property (usually 30%). Our share is protected by a legal charge on the property.

You will need a mortgage and/or savings to purchase the property and will need to make the agreed payments to the mortgage lender. No interest or rent is payable to Hafod on the equity share.

If you wish to repay Hafod’s equity share, remortgage or sell your home, you will need to contact us.

Repaying Hafod’s equity share

You may repay Hafod’s equity share at any time. We recommend that you regularly review your ownership of the property and take financial and legal advice on whether it would be in your best interests to repay the equity share. When you are in a financial position to do so, it may be worthwhile taking financial and legal advice on repaying Hafod’s equity share but you will need to take your own advice on this.

A valuation will be required by an independent RICS qualified valuer in order to agree the amount to be repaid.

The amount you repay is based on the market value of your home at the time you want to repay the loan. For example, if your loan was 30% of the value of your home, you will be required to repay 30% of the market value of your home at the time you make the repayment. If you’ve carried out home improvements that we have approved and that have added value to your property, this added value will be disregarded in the valuation.

You will be responsible for paying the valuation fee together with legal costs incurred by Hafod and yourself.

Selling your home

If you wish to sell your home you will need to contact us to establish if pre-emption rights apply to your ownership. If pre-emption rights are applicable, you are required to provide us the opportunity to purchase the property or to nominate a person to purchase your property.

You will be required to repay the equity share in order to sell the property. This will be dealt with by your conveyancer on completion of the sale of your property.

A valuation will be required by an independent RICS qualified valuer in order to agree the amount to be repaid.

The amount you repay is based on the market value of your home at the time you wish to sell. For example, if your loan was 30% of the value of your home, you will be required to repay 30% of the market value of your home at the time you make the repayment. If you’ve carried out home improvements that we have approved and that have added value to your property, this added value will be disregarded in the valuation.

You will be responsible for paying the valuation fee together with associated legal costs incurred by Hafod and yourself.

Remortgage

If you wish to change mortgage provider or wish to take out further loans for repairs or improvements which are to be secured on the home, you will need to request our consent before you take out the loan.

We will not consent to a mortgage which will result in the total mortgages on the property being greater than the percentage of the purchase price that you paid e.g. if you paid 70% of the purchase price, the maximum mortgage(s) that you may take out will be 70% of the value of the property at the time that you wish to enter into the new mortgage. This is so that there is sufficient equity in the property to repay the private mortgage and repay the equity loan to Hafod.

We may require a valuation by an independent RICS qualified valuer if it is not clear from the information provided that the total mortgages are less than relevant percentage (usually 70%) of the value of the property.

You will be responsible for the legal fees and administrative fees incurred by Hafod.

What happens to your home if you pass away?

This depends on whether you bought your home alone or with others.

If you bought your home on your own and you die, the home will be passed on in the normal way under the terms of your will (if you have made one) or otherwise under the laws of intestacy.

If you bought your home with others and one of you dies, the interest in the property of the person who has passed away will either:

• be transferred to the surviving co-owner(s) (if you are joint tenants); or
• pass under the terms of their will (if they have made one) or otherwise under the laws of intestacy (if you are tenants in common).

If whoever inherits the property wishes to live there, they will need to be able to pay all outgoings including any private mortgage and they would need approval from the private mortgage lender as well as Hafod. We would only usually approve this if it is a member of the home owner’s family or their partner who lived at the property prior to the death of the home owner.

If whoever inherits the property wishes to sell the property, the private mortgage and Hafod’s equity loan will need to be repaid as set out above.

It is recommended that owners seek independent legal advice about this. They will be able to advise if you are joint tenants or tenants in common and also on dealing with the property in these circumstances.

Repairs

You are required to keep the property in good and substantial repair and condition. This is a requirement set out in the legal charge to Hafod and it is also in your own interests.

If you buy a house, you will be responsible for all repairs needed to the property.

If you buy a flat or maisonette, you will be responsible for repairing the flat itself and will also have to contribute towards the upkeep of the building. The person who owns the block of flats (called the freeholder/ landlord or possibly a management company on their behalf) will be responsible for repairing and maintaining the outside of the building and any common parts. The costs of work will be included in a service charge which each flat owner has to contribute to.  The terms of the lease will need to be reviewed to determine who is responsible for which repairs, how the service charge is to be dealt with, etc.

Alterations

If you buy a house, you must obtain our written consent before making any alterations or improvements to the property. The same will apply if you buy a flat or maisonette, but in addition you may need to obtain the consent of the freeholder, landlord, or management company.

Insurance

If you buy a house, you are required to insure your home in case your property is damaged or destroyed by fire or similar disaster (buildings insurance). This is a requirement set out in the legal charge to Hafod and it is also in your own interests. As well as insuring the building, you may wish to insure your belongings and furniture (contents insurance).

If you buy a flat or maisonette, the freeholder / landlord will be responsible for insuring the building and you will have to contribute to the costs of that through the service charge. You will be responsible for contents insurance.

You should take your own independent financial advice before making any commitment.

Main residence (no subletting)

The funding for the purchase of properties under this scheme is so as to assist people to own a property. Therefore, you are required to occupy the property as your only or main residence. You are not permitted to sublet the property.

Homebuy - Leasehold

A small number of houses in the homebuy scheme have been acquired by the home owner on a leasehold basis with the freehold being owned by a separate third party (not Hafod). In those cases, the home owner will need to review their lease of the property to establish any differences from the responsibilities referred to above.