Improving your home
As a shared owner or leaseholder, you may want to carry out alterations and improvements to your home, and we are keen to let you do this. However, under the terms of your lease, you must get your landlord’s consent or written permission before you go ahead.
We will not unreasonably withhold permission but we may need to carry out inspections or investigate further before we can make a decision and we may make a charge to recover costs incurred in handling your request.
Details of our charges are available by emailing ContactUs@ParadigmHousing.co.uk
For some work, such as extensions and alterations to the property, you may need to obtain other approval such as planning permission or building regulations approval in addition to our permission. You will need to speak to your local council for further advice.
We will give our approval wherever possible, but when it is not possible, we will let you know the reasons why. Works that involve major changes may need to be investigated by our surveyors.
The type of works that usually require Paradigm’s approval under the terms of your lease are (but not limited to) the following:
- Installing a satellite dish or TV aerial
- Installing new windows
- Installing an external structure attached to your property e.g., a conservatory, security blinds or an awning.
- Replacing boiler and central heating system
- Installing new electrical fittings e.g., storage radiators, extractor fans etc.
- Changing the existing internal layout
- Upgrading or re-fitting kitchen or bathroom installations
- Installing laminate or wooden flooring (with the required insulation)
What will happen if I do not have permission?
It is important, where required, to seek permission before you make any alteration or improvement to your home. If you carry out any alterations or home improvement without first getting our permission, you could be in breach of your lease terms.
We would always look in the first instance to see if retrospective consent could be granted; however, we may have to take legal action against you to stop any further works or make you restore the property at your own cost for unacceptable alterations.
BUILDING REGULATIONS AND PLANNING PERMISSION
All alterations carried out must comply with current statutory regulations, with particular attention to building and fire regulations, and a certificate for gas or electrical work is required.
Where required, planning permission must be obtained, and you will be required to provide evidence that this has been granted prior to applying. Please note that it is your responsibility to provide the Home Ownership team with copies of relevant documents.
In some circumstances, it may also be necessary to consult with other residents in the block or building about your proposal.
It’s important to know that you will be liable to cover all fees associated with carrying out home improvements; this will include our administration fees, your legal fees as well as any legal fees that we are required to pay, and any required surveyor’s costs.
There is an administration fee for the cost of processing your application, which is non-refundable and needs to be received before we can deal with your request. Where partial permission is granted, we will charge within the minor improvement bracket.
- £120.00 VAT for Minor Improvements
- £180.00 VAT for Major Improvements plus an additional non-refundable fee of £100 per surveyor visit which includes a survey and/or licence.
Making a payment
You can make a payment by calling our automated payment line at 0300 303 1010 and selecting option 1 to make a payment, followed by option 2 to make a payment towards an invoice. You will need to enter your account number, which is your Paradigm ID number, when prompted.
Alternatively, to make a direct BACS payment, please use the following account:
Paradigm Homes Charitable Housing Association
Sort code: 20-01-72
Account No. 70259799
Reference: Paradigm ID number
To go ahead with your proposals please complete the online application form. Please note that your application may take up to 4–6 weeks to be processed and a response given.
Selling your property after you have made improvements
If you’ve carried out improvements to your home and wish to either sell it or buy further shares, as long as Paradigm gave permission for the improvements, any improvement value will be considered as follows:
In accordance with the lease, an independent valuation of your property must be carried out by a surveyor who is an associate or fellow of the Royal Institute of Chartered Surveyors. The chartered surveyor will determine if any improvements add value to your property.
Please see the examples below for further information.
The following examples are based on owning a 40% share of a property valued at £300,000. If you disregarded the value added by any improvements, the property’s value would be £265,000.
Buying further shares
You can buy further shares in your home from a minimum of 10%. In the case of this example, further shares will be based on £265,000 (disregarding the value added by improvements) and so a 10% share would be valued at £26,500.
Selling the property
As a shared owner, you can either sell your share to a new shared owner or sell 100% of your home on the open market.
Selling the Share
- The share value will be based on £300,000 (open market valuation)
- The 40% share is therefore valued at £120,000
You would not be able to sell for any more than the value of your share but you could accept less.
Paradigm will give their permission for their share to be sold at the same time as your share and so you won’t need to increase your mortgage; payment for Paradigm’s share will come from the proceeds of the sale.
- The value of Paradigm’s 60% share will be based upon £265,000 (disregarding the value added by improvements).
- If the sale achieves £300,000 or less Paradigm will expect the valuation of their share to be based upon £265,000.
Note: All transactions are subject to the terms of the lease. For more information regarding the process and any fees involved, all shared owners should contact the sales team on 0300 303 8046.
Shared Ownership - Additional borrowing
Homes England’s model shared ownership lease does not prohibit additional borrowing; however, it is subject to conditions contained in the shared ownership lease and in particular the Mortgagee Protection Clause.
The Mortgagee Protection Clause is a fundamental clause of grant-funded shared ownership leases.
Leaseholders should be aware that even if the value of their share has increased lenders may not be prepared to provide additional borrowing if they cannot rely on the Mortgagee Protection Clause to protect the additional sums loaned.
Paradigm’s written approval is required regarding the mortgage lender and the terms of the mortgage. Without this, the lender does not have the benefit of the Mortgagee Protection Clause and so is unlikely to advance any borrowings.
In addition to the requirement for provider approval, only certain loans are protected under the Mortgagee Protection Clause.
- The premium lent to purchase the initial share
- Further borrowing to enable the purchase of additional shares (staircasing)
- Further borrowings to comply with the leaseholder’s covenants in the shared ownership lease, such as essential repair
- Further borrowing to allow one leaseholder to buy out another leaseholder’s interest (in the same property)
Additional borrowing can only be permitted if the premium and any further borrowing do not exceed the market value of the leaseholder’s share in the property.
Further borrowing may be used to allow for repairs to the property, but not for improvements. Repairs might include works to correct wear and tear to bring the property back to at least the same standard when originally purchased, for example to replace a broken boiler. However, the addition of a conservatory, extension or loft conversion would be classified as an improvement and so not covered by the mortgagee protection clause.
Whilst some home improvements might result in an increase to the property value, further borrowings for this purpose are not covered by the Mortgagee Protection Clause. If a lender was prepared to provide a further advance for home improvements it would be for the provider to:
- Agree to the improvements being undertaken – possibly including how they were to be undertaken and by whom
- Approve the terms of any further borrowing
Covenants under the lease would not allow additional borrowing to fund the purchase of a new car, holiday, or to clear other debts etc.
For Paradigm to consider a re-mortgage we require the following:
- A redemption figure of the existing mortgage.
- A copy of the new mortgage offer.
- Full detail of the purpose of the re-mortgage.
- Official Copy of Register Entries of the shared owners.
- A current valuation of the property; the lenders valuation will suffice, however we reserve the right to call for an independent valuation if the figures warrant it.
- Payment of our Admin Fee £70.00 + VAT irrespective of whether the matter proceeds to completion or not.
Once we are satisfied that the re-mortgage meets with Paradigm’s approval we will provide our consent, we will also sign and return any Undertakings. Our Fee for Consenting to the Mortgage is £70.00 + VAT which is payable before we will issue it.
Our charge for receipting the notice of charge is £40.00 + VAT
Note: All fees quoted are subject to change.