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Frequently Asked Questions

The FAQs below explain HOP in detail.  These are designed to be a guide and are subject to change. Upon being accepted into HOP, you will receive a Homebuyers’ Guide with all the key facts.

If you have any questions that are not answered below, please email us at info@hophomes.co.uk or call us on  +44 (0) 20 7930 8600.

What is HOP?

HOP is a form of shared ownership, but with a twist.  With HOP, you can own the home you want, when you can’t get the mortgage you need. Your new home might be closer to schools, to transport links, or to family.  

 You choose the property yourself from the listed market, you contribute at least 10% cash value, and a carefully selected co-investment partner will provide the rest with no mortgage needed. You will then pay manageable monthly HOP payments calculated against the co-investment and inflation. You can work out your HOP monthly payments with our affordability calculator. 

 Unlike a conventional mortgage, HOP is not a lender, which means you are never in debt. Unlike renting, you can make improvements and decorate your home. HOP is the best of both worlds! 

Why should I HOP?

HOP will offer you up to six times your household income to find your new home. When using HOP, you are in control of choosing the property YOU want. You are not restricted to paying the premium on a new build or to a property chosen by investors. You can personalise your home, and you can have as many pets as you wish!

On top of this, you will benefit from any increase in the value of the whole property over time, not just your share. The longer you remain in your home, the greater your share in any value increase in the overall property price. You can find out more about this by using the Share calculator on our website. 

Over time, you also have the option of buying a bigger share of your property, up to 100%, at any time you want!

How is HOP different to a mortgage?

  • HOP can co-invest up to six times your household income, which is more than a typical mortgage lender
  • Your monthly HOP payments are linked to inflation, not interest rates
  • You will not need to renegotiate or find another mortgage
  • With a mortgage you absorb 100% of the decrease in your home’s value; with HOP it is shared with HOP’s investors.

Buying a home with HOP

How do I HOP?

The following outlines exactly how the HOP process works, and what you need to do at each step.

  • Step 1 – Receive a ‘Decision in Principle’

Once you have registered and have been invited to apply, you will need to complete an Eligibility form. This form gives us all the information we need to check that you are eligible to HOP with us. Once we have assessed the information and we are able to qualify you, we will offer you a ‘Decision in Principle’. You are then free to go and find your dream home!

  • Step 2 – Select a Property

We will provide you with a Property Selection Guide. This will give you lots of guidance in finding the perfect property. When you begin your property search, you should think carefully about researching and choosing an area which suits you and your needs. Once you have decided which area your ideal home should be in, look on websites such as rightmove.co.uk and view as many properties as possible. We will provide you with an Agent’s Guide to share with your estate agent to explain the HOP process, as we are aware that it is slightly different from what most High Street agents are used to.  When you have viewed and selected your ideal home, complete the Property Submission Form and send it back to us. At this point, we will assess the properties, and if they fit with our criteria, we will match you up with a co-investment partner.

  • Step 3 – Make an offer

Once we have an investor committed to co-investing in your chosen property, we will make an offer and negotiate the best possible price with your estate agent. When the offer is accepted, the official buying transaction process will begin!

  • Step 4 – Choose a Solicitor

At this point, you will need to appoint a property solicitor to do your legal work. Your solicitor will ensure you have everything necessary to help you to:

  • Buy your home quickly
  • Carry out the appropriate checks on your property
  • Ensure all your paperwork is in place

Once you have appointed a solicitor, we will provide them with a guide to HOPS lease which will outline the details of the HOP lease, however we strongly recommend using a solicitor who has a good understanding of a Shared Ownership Lease, as this is quite similar. We can also make you a recommendation from a panel of highly competent solicitors who are fully understanding of the HOP lease.

  • Step 5 – Full Assessment and Conveyancing

Your solicitor will work alongside HOP to fulfill the legal house buying process. You will be required to provide various documents to support the full assessment process, including underwriting and the final property assessment based on the survey and valuation. Your solicitor will explain the HOP lease to you, and you will be required to sign it.

  • Step 6 – Exchange of Contracts

When all the checks are done, it will be time to exchange contracts. At this point, your solicitor and the investor’s solicitor will swap signed contracts and you will need to pay your 10% deposit. You will be given a date of completion and you can start planning your moving day — booking a removal company if needed.

  • Step 7 – Completion

The day has arrived! The solicitor will pass on yours and your co-investment partner’s financial contributions to the seller’s solicitor, and the house will be yours. You will receive your keys, and the celebrations will begin!

We will provide you with a Home Owner’s Guide which will outline the ongoing process of the HOP payments, and any other information you will need. 

Can I get a mortgage or a personal bank or building society loan to fund my 10% contribution?

No, you can’t. You must have a minimum of 10% of the property price in cash, ready to go in your account at the time of application or available through the sale of your existing property.  For example, if you are looking at buying a property which is £200,000, you must have £20,000 or more saved in your bank account (including any gift donations) accessible and ready to go.

Are there types of properties and locations that HOP will not consider?

Currently, we can only HOP with freehold self-contained and residential houses in England which are within the price bracket of £75,000 to £1m. 

Properties will need to be structurally sound and in an environmentally safe area.

How much will HOP cost me?

  • At least 10% of the property price.
  • HOP’s Product Fee – This is £999 (including VAT). £249 will be payable when we give you a Decision in Principle, and £750 payable right before we make a subject to contract offer on propertyThis price includes the RICS Homebuyers and valuation reports, a copy of which will be made available to you and your solicitor. 
  • Solicitors fees – These are usually between £700 to £1,500 including Land Registry Fees, local search fees and other expenses. You pay these to your solicitor on completion date.
  • Stamp Duty – You will not pay Stamp Duty on the purchase price of your home because your contribution of 10% or more to the purchase price of your home is zero rated below the £125,000 threshold.
  • You will pay Stamp Duty on the rental part of the HOP lease (Monthly HOP payments) This will be a one-off payment which your solicitor will calculate during the conveyancing process. It is very likely that the stamp duty will be significantly less that what you would pay if you were buying the property using a mortgage. More details of how this is calculated can be found here: https://www.tax.service.gov.uk/calculate-stamp-duty-land-tax
  • Insurance – We will organise your building insurance, which is mandatory when buying a property. This is thepolicy that covers the financial cost of repairing damage to the physical structure of a property in the event of damage or theft and it will be at your cost. HOP can negotiate better insurance pricing for you as we can buy in bulk. We would also recommend that you take out content’s insurance, which protects all your possessions within your property. You can find out more about the potential cost of your insurance here: https://www.moneysupermarket.com/home-insurance/calculator/
  • Removal Costs – If you require a removal service to help you move, make sure you get a few quotes as costs can vary hugely.
  • Connection charges – You will want to consider the price of setting up phone lines, internet points and any television packages you may wish to purchase.

How do you assess whether I can afford to buy with HOP?

As responsible partners, HOP will check that you can afford HOP’s monthly payments. We know that most people’s wages rise, so factoring this into our affordability assessment allows HOP’s investors to co-invest more than a typical mortgage lender.

HOP will arrange co-investment of up to six times your joint household income. Please do your own affordability check here: 

Affordability Calculator

How do I work out my household income?

Household income is the combined gross annual income (before tax & deductions) of all the members of a household who are of a legal working age and are going to be applicants. They will legally own a share of the property.  We only accept a maximum of two applicants.

Can I HOP if I already own a home?

You cannot HOP on a home that you already own.

However, you will not have to sell existing buy-to-let property or other investments, as long as your HOP home will be your main residence.

Is a lease involved?

Yes. A lease is a recognised shared home ownership agreement that protects both yours and your co-investment partners’ rights in law and is what allows us to give you flexible home ownership options. Property interest acquired by you will be on a HOP shared ownership lease, which will be for 125 years.

Who organises the Homebuyers Report?

HOP arranges the RICS Homebuyers Report (with survey or valuation), which is a report that assesses the condition and value of the property. The price will be £499 payable at Subject to Contract Offer.

What happens if the property is valued lower than the asking price?

We will work with you to negotiate with the vendor to reduce the asking price. If this is not possible, you will need to increase your cash contribution so that HOP’s investors are only providing a maximum of 90% of the valuation, rather than 90% of the the original asking price.

If I change my mind at any time, can I withdraw from the process?

Yes, until the exchange of contracts you are not legally bound. However, you will bear the costs of withdrawal, as none of the fees you incur will be refundable in this instance.

What happens if the purchase doesn’t go through?

If your offer on a home is not accepted or there are complications before exchange, we will ask you to put an offer on another chosen property. If your home purchase falls through, you will only be asked to pay for a new Home Buyers Report on the next purchase.

Can I have a lodger?

You can rent a room as long as the property is your main residence and you are still living there.

Can I have pets?

Yes!

Can I HOP if I have had a bankruptcy order, an Individual Voluntary Agreement (IVA) or a Debt Relief Order (DRO)?

Unfortunately, if you have been declared bankrupt, had an Individual Voluntary Agreement or a Debt Relief Order in the last three years, HOP will not be able to help you buy your home.

Ongoing Costs - HOP monthly payments

In return for HOP arranging co-investment in your home, you make a HOP payment each month. In year one this is 5% of the HOP investors’ co-investment amount. 

For example, if you buy a property valued at £100,000 and HOP’s investors contributed £90,000 (90%) then your annual payment would be £4,500, making your monthly payment £375.

How do my monthly HOP payments increase each year?

Payments increase in line with inflation (also known as the Retail Price Index, or RPI), plus 0.5%. HOP caps these payments to never increase by more than 5%.

What is Retail Price Index (RPI)?

In the United Kingdom, Retail Price Index (RPI) is a measure of inflation published monthly by the Office for National Statistics. It measures the change in the cost of a representative sample of retail goods and services. The RPI is used by the government as a base for various purposes, such as social housing rent increases.

Repairs and improvements

Who is responsible for the upkeep and repair of the property?

You will be responsible for the upkeep and repair of your home.

What about improvements?

With a HOP co-investment we want you to feel 100% at home, so you can decorate your home.

Even though the HOP lease does not allow for structural or exterior changes (common across most shared ownership leases), in practice you can talk to us if you want to make alterations. This is a requirement of most mortgage lenders.

If HOP’s investors agree with your upgrade or structural proposal, we can create a side agreement between you, the investor and HOP to allow it. HOP’s investors may also help with the cost of the improvements and we will agree the change in HOP payments with you.

Sharing your home’s value growth

What happens if my home increases in value?

On day 1 you put in 10% of the purchase price, so your share in the growth is 10%. In year 2, you get an extra 25% from the entire home’s value growth, not just your share.  Following this, you get an extra 2% of the growth every year. This is all on top of your 10% share.

For example:  After ten years, your share of the increase in value will be 51%. So, if your £300,000 home increased in value by £100,000 and you decided to sell, you would receive £51,000, this being your share of growth (51% of £100,000)

View Gain in Value Share calculator

What happens if my home decreases in value?

In a worst-case scenario, your £300,000 home decreases to £250,000 over ten years. In this case 51% (£26,000) would be deducted from your initial investment of £30,000 (10%) and the remaining £4,000 would be returned to you.  

In comparison to a normal mortgage, HOP is a much better deal.  With a standard mortgage, you would incur the entire loss, so you would lose out on the full £50,000.

Can I increase my share in the property?

Yes, you can increase the share that you own in your property over time, up to 100% if you wish. If you increase your share in the property, the amount of HOP payments you pay will be re-calculated and reduced.

You can buy an additional share at any time up to twice a year with a minimum amount of £10,000. We call this ‘HOP Up’.

As you will be buying more of your property there will be associated costs to pay.

What happens if I run into financial difficulties?

If you run into financial difficulties, talk to us as soon as possible so that we can help.

We will work with you and support you as much as we are able. As every person’s situation is unique, we would work hard to find a solution that meets your circumstances.

Our aim is to ensure you are able to stay in your home for the long-term.