If house prices go up, will the seller try and increase the price or back out?
Nope! The Purchase Agreement guarantees your price and locks it in on day one. If the value goes up, you benefit. If the market falls, or the house is wrecked by floods, you can walk away. You hold all the cards.
Once you agree to buy, the seller must complete the sale. Legally it's just like exchanging contracts for sale.
Are there any fees to pay?
When you apply, there are no fees for tenant referencing and you don't need a security deposit. When you've been approved for the home you pay £995 Purchase Agreement Fee to secure it and then it's yours :-)
Can I decorate and treat the home as I please?
Yes. The house is now your home, so you can make it your pride and joy. Paint it, sort out the garden; do whatever you can to improve it. If you need building regulation approval or planning permission just get in touch with the seller and obtain written consent.
We strongly advise all of the people we work with to do what normal homeowners would do - make the home better and add value to it where you can. After all, it’s effectively your home, and in five years or less, it’ll officially be yours, in black and white.
Tenancies usually stipulate ‘No Pets’. What's your policy?
Pets are 100% allowed. Pets make a house a home, and they’re part of the family. You’re not tied down with the usual stupid restrictions imposed by landlords, because you’re not a normal tenant.
How does the tenancy work?
Until you've built up your purchase deposit and you're ready to buy, you’re officially renting your home. You'll sign a standard Assured Shorthold tenancy but the rent is fixed until you buy.
How is the purchase deposit built up?
You pay a separate payment to your rent which goes into your client account held by the managing agent. We'll work out what you need to pay over 60 months (5 years) to build a 10% deposit. The purchase deposit is transferred to your solicitor when you're ready to buy.
Who is responsible for repairs?
Repairs are your responsibility, and it’s only fair that it should be the case - the seller is no longer benefiting from house price growth or improvements carried out on your behalf.
The seller will carry out annual gas safety checks and service the boiler. The property will also have Home Care cover in place for any boiler breakdowns and the central heating system.
You are free to use this cover subject to the provider’s standard call out charge.
Who takes care of buildings insurance?
Until you buy the property, the seller will insure the buildings of the property. There is a £250 excess on any claims, that you’ll have to cover in the event of a claim. You are responsible for your own contents insurance.
Do I need a survey to buy the house?
Your mortgage lender will need one when you buy. We also recommend that you survey the house before you move in and we’re happy to provide full access arrangements for inspection.
If I walk away, or can't buy the house, will I lose out in any way?
You shouldn’t move in unless you intend to buy within five years. But life can throw the unexpected upon us. If you decide you want to walk away from the Purchase Agreement, you can, but you’ll have to pay a Non-Completion fee to the seller. Your purchase deposit will be returned to you.
Can I sell the house on instead of buying it?
You would need to buy it first and then you can sell it on. You can also assign the Purchase Agreement to someone else, which is useful if there are two or more of you in the property, and one of you wants to move on.
How does buying the home actually work?
When you've built up your purchase deposit and found a suitable mortgage, you let us know. You don't have to wait until your 5 year Purchase Agreement expires.
Three months before your 5-year Purchase Agreement expires, we'll write to you to remind you to complete on the purchase and serve a notice bringing the tenancy to an end.
At that point you have two options:
What is the Non-Completion Fee?
A fee of 5% of the Purchase Price is payable by you to the seller if you do not purchase the property. This may apply if you leave the property during the 5-year term, or if you decide not to buy at the end of the term.
Your purchase deposit funds will be returned to you in full, after taking off any fees, rent or repairs due. You’ll be responsible for making sure that the property is returned in the same condition to when you moved in.
How do I go about getting a mortgage when I’m ready to buy?
Contact your mortgage broker or local bank. For the best rates, you should look for independent mortgage brokers who’ll search the market for the best products to suit your requirements. No one can predict the future, but you need to be satisfied that your income will be sufficient to get the necessary mortgage funding in place when you're ready to buy.
FAQ's Last updated 3rd May 2020
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Properli Ltd Trading as "5 Year Home Plan". Reg'd England. Company No. 12528577
Registered Office: Unit 5, Bicton Business Park, Isle Lane, Shrewsbury, SY3 8DY
