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Frequently Asked Questions

Purchasing with HOP

Is HOP available now? Can I buy any property?

Initially, the HOP product will be available on specific properties that have been pre-approved by HOP for their quality and value.

Our aim is that, within a year, you will be able to choose your own property to buy with HOP. If you are interested in this option, please register your interest.

How much can I buy?

You must buy a minimum 10% share in the property. You can buy a larger share if you wish, at any time in the future.

How much does it cost?

For budgeting purposes you pay:

  • Minimum Share – 10% of the property value
  • Product Fee – £1,800 (including VAT), paid to HOP. This covers the RICS Standard Valuation Report, conveyancing searches, and our administrative costs.
  • Solicitors Fees (including disbursements) – approximately £1,000 (inc. VAT) paid to your solicitor. These are the fees that you will pay your chosen solicitor who works on your behalf in the purchase of your HOP product.
  • Stamp Duty Land Tax – depending on the value of the property – Your solicitor will be able to calculate this for you but is likely to be nil. We can provide you with an estimate depending on the value of the property.

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

As responsible partners, we will check that you can afford the monthly HOP Payments. We know that most people’s wages rise over time along with inflation and factoring this allows us to avoid excessive stress testing. We are therefore able to co-invest more than a typical mortgage lender may lend.

Our metric is simple, we will commit to the lower of:

  • Up to 6 times the combined Gross Annual Income of all applicants less the combined Annual Commitments of all applicants; and
  • Up to 90% of the property valuation

How do I work out my household income?

Household income is the combined gross (before tax & deductions) income of all the members of a household who are of a legal working age and are going to be applicants and own a share of the property, up to a maximum of 4 applicants per property.

Do I qualify if I already own a property?

You will still qualify with us if you already own property, as long as the property being purchased is going to be your main residence and you will be living there. You will not need to sell your existing buy to let or investment properties.

You cannot enter into an arrangement with us on a property you currently own.

Is a Lease involved?

HOP, like many major shared ownership partners, uses a lease as the basis of our partnership. A lease is a recognised shared home ownership instrument that protects both parties’ 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 125 years for a freehold property. For leasehold properties, such as flats, we use the remaining period of the current lease, up to a maximum of 125 years. Leasehold properties must have a minimum 80 year lease to be eligible for HOP.

Who organises the Homebuyers Report or RICS Valuation Survey?

The Homebuyers Report or RICS Valuation Survey is a condition survey and valuation report. We will arrange this and the cost will come from the Product Fee you pay.

What are the legal fees and associated costs?

You must retain and pay for your own solicitor to advise you on the terms of the HOP Lease. Your solicitor will advise you throughout the process and will have a sole duty of care to you.

What happens if the property is valued lower than I offered (down-valued)?

Initially only our pre-approved properties will be available on HOP. As we have a relationship with the vendor the properties should only be sold at their correct value, so this problem should not occur.

Once the HOP product is available universally, and the property is valued at less than what you offered then you will need to look for a solution so that HOP is only contributing up to 90% of the property value. You can try and negotiate with the vendor to reduce the price; or increase your cash contribution so that we are only providing a maximum of 90% of the valuation.

Which solicitor should I use?

You can use any solicitor you wish. However, you should check they are familiar with the HOP shared ownership lease to ensure a smooth and cost-efficient process for you.

To assist, we have an approved a panel of solicitors for you to choose from, who are experts in shared ownership and will therefore be able to provide you with a good level of service at a competitive 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 and can withdraw. However, you will bear the costs of withdrawal, as none of the fees you incur will be refundable.

What if I pay the fee and the purchase does not go through?

There is no fee for the application, affordability assessment and “Offer in Principle Letter”. This will assist you in determining how much you can afford and finding the right property at the right price. We will at this stage ask you to obtain a credit report as this will ensure there is no credit trail left on your report. We will review your credit score for all applicants and request all the necessary supporting evidence to ensure we have completed our underwriting procedures. The Offer in Principle Letter is not binding on us.

The “Offer Letter” is issued on payment of the “Product Fee”, once you have had an offer accepted on the property you wish to buy.

If you have disclosed everything in your application and your circumstances have not changed between the issuing of the Offer in Principle Letter and paying the Product Fee, your Offer Letter will be valid for 90 days.

After this, you would need to refresh your application every 60 days until you find a property, for a small additional Refresh Fee of £250 plus VAT. This Refresh Fee covers the cost of updating your credit score and gathering any updated information from you.

Can I have a lodger?

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

The ongoing costs of co-ownership

What are HOP Payments?

In return for HOP investing in a property, you make a “HOP Payment” to HOP every month, with the annual total being 5% of the HOP share of the purchase price in year 1.

How do my HOP Payments increase with inflation?

Your payment increases each year by the increase (but not decrease) of the RPI, plus 0.5%.

What is RPI - Retail Price Index?

In the United Kingdom, the Retail Prices Index or 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 institutional investors (who have pension payment obligations based on it) and the government as a base for various purposes, such as social housing rent increases.

What else will I need to pay in addition to HOP Payments?

You will need to pay for the insurance costs of the property. We will arrange the insurance for you for the buildings and other risks (but not contents) and recharge this to you. As we will be going to a single insurance provider we are able to pass on all the pricing benefits directly to you. You can add home contents and other insurances with our approved insurance provider or you can obtain this insurance cover from a separate provider, it is totally your choice.

Repairs and improvements

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

You are responsible for the upkeep of your property. You may also need to pay a service charge towards maintenance of communal areas such shared gardens or un-adopted roadways. This information on the services and estimated costs will come from the property vendor or the management company and be advised to you by your solicitor.

Most shared ownership leases are full repairing leases. This means that as a leaseholder and home owner you are responsible for the costs of all repairs and maintenance both internally and externally. This is the case with our Lease as well.

What about improvements?

We may contribute upto 75% towards the cost of all major expenditure which we regard as permanent property improvement that adds enduring value increase, for example, if you built an extension or a loft conversion.

Our increased contribution and the increased value of the property will likely change your share in the property and therefore your HOP payments will change accordingly.

Fees and costs will be charged and this is subject to further terms and conditions.

Changing your share

Can I increase or decrease my share in the property?

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 accordingly.

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

You can also sell any previously acquired HOP Up investment in minimum amounts of £10,000 back to us once a year; this will increase your monthly payments – we call this HOP Down.

You will pay fees and costs on both HOP Up and HOP Down.

As you will be buying more of your property there will be associated costs including the cost of a new valuation report, possibly some additional Stamp Duty to pay and a solicitor to provide you with a calculation for how much to pay. We can help you with this at the appropriate time for budgeting purposes.

What happens if I run into financial difficulties?

If you run into financial difficulties, get in touch with us as soon as possible so that we can help. We will work with you and support you to ensure you are able to stay in your home or move on if that is what you want. As every person’s situation is unique, we would endeavour to find a solution that suited your circumstances.

In exceptional circumstances, for example in the case of acute financial difficulties, we may consider offering to buy your initial HOP investment and offer you a normal market rental tenancy.

Selling and moving on

Can I sell anytime?

Yes – of course you can choose to sell anytime.

How do I sell?

The first thing to do is to advise us that you want to move so that we can explain how we can remain Home Owning Partners to you in your new home and what we can do to assist in the sale of your existing home.

We would typically offer you a price for your interest in the property so that we can then offer it for rental or HOP to others. This will be based on an independent valuation and allow for your full growth share. This could mean that you would save on estate agent’s fees and possibly legal fees as well.

Or we would agree that you can sell the property through a local estate agent of your choosing, as long as we agree the value of the property before it goes onto the market.

How do we split the proceeds of the sale of a HOP property?

If you decide to sell your property we will split the sale proceeds as follows:

  • You get your initial percentage (typically 10% of the original purchase price) plus any additional HOP Up share you have bought.
  • We get our initial investment amount (typically 90% of the original purchase price) less any additional share you have bought
  • This leaves the growth in value to be shared. You get your initial percentage + 25% of HOP’s percentage of the total growth in value, plus a further 2% of HOP’s percentage for every full year since the acquisition, and HOP gets the balance.
  • You pay a HOP repayment amount, which is calculated as 9 months’ HOP Payments reducing by one month for every full year you have been with us.
  • You pay your legal fees, estate agent’s fees, property valuation, and disbursements.

Can I use the HOP again on my next home if I want to move?

Yes. Our product is intended to be able to be ported with you to your next home – but does not have to be.

Given this is a lease relating to your current property, purchasing a new property would be a new application for a lease on your next property. If you want more funding then we will endeavour to provide that.

We can calculate the new payments on the new property based on the old payments at old rates plus any further investment we make at the new rates. You may not even need to add more equity as long as there is at least 10% equity available for the new property.

About the Home Owning Partnership

Who is behind HOP?

Please see the About Us page to meet the founders, the HOP team and to understand how our product is backed financially.

What’s in it for HOP?

HOP was launched by Mill Group who are an established incubator, investor, manager and advisor of real assets investment innovation. The HOP product allows our backers to invest in property alongside you, sharing profits and responsibilities.

You can find out more about how HOP benefits our financial backers on the Investors page.