Affordable home ownership

Affordable homes 

Affordable homes ownership properties are owned freehold 70% with 30% held in perpetuity. 

Rent is not charged on the 30%. 

When the property is re-sold the property must be marketed and sold for 70% of the open market value.

If you wish to sublet the property, then the rent charged must be 70% of the market rental value and the Council must approve this rental figure and the tenant. An application process applies for both the seller and purchaser.

Shared ownership properties

These are properties purchased as shared ownership where the owner has a shared ownership lease and not the freehold title (100%).

Rent is paid on the share that is not owned and there may also be a service charge depending on if there are any communal areas, such as, landscaping, car parks or street lighting.

Criteria for shared ownership 

• You must be 18 years or over.
• Your household income must be between £15,000 and £80,000 (although the lower value may vary depending on the price of the property).
• You do not currently own a home or have your name on another mortgage.
• You are able to obtain a mortgage or have cash available (you will still need Derby City Council’s approval).
• You have not been in mortgage or rent arrears or in breach of your current tenancy agreement.
• You have a good credit history and all cash applicants must undergo a credit check.
• You have at least £2,500 to cover the costs associated with purchasing a home.

Priority is given to serving members of the armed forces, current local authority or housing association tenants.

Costs for shared ownership purchase

• You will have to pay for your own legal costs. Costs vary and you need to ask your solicitor for a fee quote prior to instructing them.
• You may have to pay for the Council’s legal costs if work is required and we are not selling any of our shares – such as, the resale of a shared ownership or freehold property.
• Conveyance (solicitor) costs.
• Searches (for example, a coal mining search will tell you if there has been any mining under or very close to your home. A local authority search will tell you if there are any local matters that affect you home such as a new road or a ban on advertising boards or similar).
• Land Registry fee for recording the change of legal ownership of your home (from us to you).
• A bankruptcy search so the mortgage lender will know if you have ever been bankrupt.

There may be other costs to pay if you want more information about your home. For example, you can have an environmental search done which will tell you if there is a risk of flooding or of any known pollution in the area.

Depending on the value of the property you may have to pay SDLT. This is a tax paid to the government when you buy a home. Your solicitor will be able to tell you if SDLT applies on your purchase and how much it will be.

Ongoing costs for shared ownership

On completion the following ongoing costs may be payable:

• Rent (increased annually)
• Service charge
• Management fees
• Audit fee
• Buildings insurance

Deed of Postponement

(Additional borrowing for home improvements)

If you are looking to re-mortgage and borrow additional funds to carry out refurbishments on your Right to Buy property that was purchased in the last 10 years then you will need to ask your solicitor or mortgage lender to contact our Legal team at Legal.Property@derby.gov.uk and send a Deed of Postponement request. They will also require:

• a copy of the new mortgage offer dated within 3 months
• the redemption statement dated within the last 1 month
• quotes for works (which our legal team will confirm the requirements of in their email to your solicitor or mortgage lender).

Re-mortgaging

(No additional borrowing)

If you are looking to re-mortgage your Right to Buy property that was purchased in the last 10 years and don’t wish to carry out any improvements but want to:

• get a better mortgage deal
• change the mortgage from Joint to Sole
• change the mortgage from Sole to Joint.

You will need to ask your solicitor or mortgage lender to contact our Legal team at Legal.Property@derby.gov.uk. Our Legal team will also require:

• a copy of the new mortgage offer dated within 3 months
• the redemption statement dated within the last 1 month.

Parkland View Extra Care (flats)

Affordable older persons shared ownership (OPSO)

This is an Extra Care development of individual flats but care staff are based within the building.

It is a mix of older persons shared ownership (OPSO) and affordable rented apartments. An OPSO property can only be sold to somebody who is aged over 55 who has already sold their property or are selling it at the same time as the purchase.

You can purchase a share between 25% and 75%. Once you own 75% you won’t have to pay rent on the remaining share but you would still have to pay the applicable service charge.

Applicants who have sufficient equity to be able to buy a suitable property from the open market would not be eligible for OPSO or for affordable rent.

Eaton Court (flats)

Shared ownership

This is an over 50’s scheme and can be purchased as shared ownership or leasehold up to 100%.

An application process applies for both the seller and purchaser.