Buying off plan with Lockley Homes
The process behind buying off-plan is a little different to buying a new home that’s already built or part-built. This is what happens when you buy off-plan with Lockley Homes.
When you’ve made your decision to buy, you’ll pay a reservation fee equivalent to 1% of the purchase price and this will reserve your new home. You will need to be ‘proceedable’, which means that you need the funds immediately available to complete the purchase or for your current home to be ‘Sold – Subject to Contract’. This means that you have agreed a sale of it and that your sale is currently being handled by solicitors. You will be required to exchange contracts on the purchase of your new home within 28 days. Please note that the reservation fee is non-refundable if you do not exchange a contract to purchase within the required timescale.
2. Exchange of Contract
The all important Exchange of Contracts on the purchase of your new home will take place when all of the legal documentation has been agreed between the parties and this means that both parties are legally committed to the transaction. At this point you will pay an amount equivalent to 10% of the purchase price of the property to your solicitor (less the 1% reservation fee already paid).
A date for Completion of the Purchase will be set at this time but when the exchange has happened, you can actually start planning your move.
3. Completion of the purchase
When you Complete the purchase you will pay the remaining 90% of the purchase price, which, once again, is done through your solicitor and your new home is finally yours.
How to speed up the process and make things run more smoothly
Lockley Homes will recommend totally independent solicitors who they have dealt with in the past and who they believe can work to the required timescales.
Leasehold or freehold? Tenures explained
Most private property in the UK is sold on either a freehold or leasehold basis. Within new housing developments, individual houses are usually sold with a freehold title, meaning that the owner owns the land on which the house stands, and will own it outright in perpetuity once any mortgage or loan is paid off.
Leasehold titles are granted for a specific length of time, effectively giving the lessee the right to live in that property without owning it outright.
Any communal areas on a development which don’t fall under a specific plot title are usually owned on a separate freehold basis by a third party management company. Residents will pay a fee to the management company for the maintenance of these areas – car parks or communal gardens for example.
The freehold title on an individual property usually comes with restrictive covenants – clarifying what you can and cannot do on the property. These restrictions are generally in place to create good neighbour relations. For example, if someone parked a big van permanently on their driveway, which affected a neighbour’s outlook or access to their own property, they would be breaking a restrictive covenant.
The Lockley Homes approach
At Lockley Homes our focus is on protecting each residents investment/home and therefore our small exclusive developments maintenance is of the upmost importance.
On the completion of any Lockley Homes development, the freehold and common parts are transferred to a specially incorporated management company. Each plot owner will be an equal shareholder in that company therefore owning an equal share of the freehold to the entire development.
Each individual plot is sold leasehold on a 999 year lease, and owners pay a yearly ‘peppercorn rent’ – just a few pounds. This creates a “virtual freehold”. Please note the ground rent does not increase over time.
Residents are in control of management
There’s no third party management company on a Lockley Homes development. Instead, residents have control over managing their own development and can put in place a sinking fund to cover future maintenance costs of things like gates, lighting or landscaping. It’s up to them how much goes into the fund, but it could be as little as £50 per household per month. We feel that not only is this fairer, it can help build a strong community spirit, with everyone working towards the same goals of maintaining their development and helping protect their investment.
A Lockley Homes development - The future
At Lockley Homes we are keen to ensure that your cherished home also proves to be a wise investment but this can only be done if the legal structure governing your home is correct at the outset.
At a Lockley Homes development, long after completion, you will not see weeds growing in communal borders, or caravans, motor homes or trade vans parked on what used to be pristine driveways.
This is because all owners of a Lockley Home contribute to the ongoing management of their development to ensure that the high standards that attracted you as a purchaser in the first place, are retained going forward.
Lockley Homes are sold on 999 year leases but vitally, residents own their own freehold through the Management Company of each, individual development.
For technical, legal reasons, that your solicitor will explain to you in full detail, the property being held leasehold ensures that the covenants within the long leases have to be observed and these covenants are designed to prevent ‘bad neighbour’ situations arising such as inappropriate behaviour on or use of the development, improper vehicles on the development, as well as the more regular issues of maintenance, planting and landscaping of communal areas, etc.
All of these legal measures - put in place prior to exchange of contracts - are intended for the long term interest and benefit of owners and Lockley Homes retain no material interest in their developments going forward.
Lockley Homes believes that residents managing their own developments is the key to ensuring the protection and enhancement of these assets and it will be for the residents and neighbours to decide, as a community, how they will manage their development, how they will fund it, etc.
It is anticipated that each resident will pay in the order of £50 - £250 per month depending on the costs of each individual development but in life, you tend to get what you pay for, and if you are the sort of person who has purchased a Lockley Home, then you are unlikely to be the sort of person who cant see the merit of this approach.
We welcome the opportunity to discuss any concerns you have in more detail.