Delayed Completion Buyer – FAQ
Q. Can I buy a house with a deposit as low as 5% of the current value?
Yes but you will also need to save towards a larger deposit for when you come to complete in 7 years. Currently you will need at least 10% deposit.
Q. What is the monthly fee that I must pay?
The monthly fee is what is called the ‘license to occupy the property’ it is similar to the fee paid when renting but this gives you more scope to put your own stamp on the property. Although you will still need permission to make structural alterations from the mortgae lender.
Q. Is buying a house with a Delayed Completion the same as shared ownership?
They are similar, both are aimed at helping people onto the property ladder, as it is often difficult to raise the money for a deposit whilst renting.
Shared ownership allows you to buy a share of the property that you can afford. You end up with both a mortgage for your share and paying rent on the part owned by the other party you are sharing with (Council or Developer). You are usually able to buy a further share in the future, if not you must sell your share back or to another buyer.
With a delayed completion, we exchange on the property now at the fair market value. You only need a minimum deposit of 5%. We set a term in which we expect you to complete, normally 7 years. This allows you time to save up more money for the rest of the deposit. When it’s time to complete, you obtain a mortgage from a lender,
Q. What if I stop paying the monthly fee?
The payment of this fee is very important in the same way that paying your mortgage is very important. For example: If you stop paying your mortgage, the bank will have the house repossessed. If you are facing difficulty with meeting your fee payments, you must let us know and we will look to find a solution that helps. This may involve selling the house and refunding your deposit minus the selling fees.
Q. What if I change my mind within the 6 year term?
If you want to cancel your purchase contract, you need to follow a process the same as would be the case with any Mortgage. Firstly you need to contact us in writing telling us you want to get out of the property before your completion date.
If you just walk away, you will lose your Deposit.
If you don’t want to complete when the time becomes due, you can have us sell the property to someone else, we’ll refund your deposit less our selling costs.
Q. Can I Complete the purchase of the property before the 6 years is up?
Yes, but the same conditions and fees will apply as if you had gone full term with the contract.
Q. What happens if the property value has not increased sufficiently?
In the unlikely event the price of the property has remained unchanged or gone down, you have the choice of completing at the value you Exchanged at – which was the market value 6 years earlier, or you can ask to have the term increased.
Q. Once I’ve Exchanged Contracts, do I need to live in the house?
No. With our consent beforehand, you can rent out the property but it will be a term of our consent that the property is only rented out under the usual type of AST tenancy agreement so that the occupier obtains no security of tenure. You are still fully liable for the costs and maintenance.
Q. What happens if Kent Property Solutions is placed into receivership before the sale completes?
The receivers will look the value of the contract. If there is sufficient value – which we ensure there always is at exchange, they will look to trade the contract for the value. Normally the buyer and seller will be given the opportunity to complete.
