Prerequisites to buy a property
- To register as a co-operative
- A business plan with cashflow projections
- A bank account
- a potential mortgage and other possible loans - you need to have spoken to some lenders and had a positive response
- loan stock or co-op capital to make up the rest of the purchase price and other expenses
- A conveyancing solicitor to help you with the legal transfer in ownership.
- An architect if your group is planning quite significant renovations.
Once you've found somewhere that works for your group, or part of your group who is being housed at the property (if you are not housing everyone together), make sure you decide amongst yourselves who will talk to whom (the bank/other lenders, owners, solicitor, architect, planning department, builders, etc.) and then start the process.
What to look for in a property
Energy Performance Certificate
Look at the Energy Performance Certificate. This should be available from whoever is selling the property, and are also free to look up online on the national EPC register.
What is an Energy Performance Certificate?
Energy Performance Certificates (EPCs) are needed whenever a property is built, sold or rented. When you buy a property it will be provided by the vendor or estate agent and when you get a new member you must provide it to them. In Scotland, you must display the certificate somewhere in the property, e.g. in the meter cupboard or next to the boiler.
An EPC gives a property an energy efficiency rating from A (most efficient) to G (least efficient). It contains:
- information about a property’s energy use and typical energy costs
- recommendations about how to reduce energy use and save money
An EPC is valid for 10 years. So, if you've recently bought your property, you can provide your members with the EPC you just got for quite a while before needing to get a new one. You don't need to get a new EPC if you've improved your property, though you might decide that it's a good idea to do so. You also don't need to get a new one unless you're advertising for new tenants.
www.gov.uk has a list of accredited assessors, who can assess your property and produce the certificate. They will include your EPC on the national register unless you opt out. You can be fined if you don’t get an EPC when you need one.
Floor plans
Find out if there are floor plans available for the building that you can go through with an architect, a building project manager, or someone else with some experience. Things you might want to look out for are - the size of the rooms and whether proposed bedrooms meet local and national space standards, the number of steps in your property, size of shared areas in the house etc.
Planning: Use Class
Check what the building’s ‘use class’ is, and if you will need planning permission for a ‘change of use’, by looking at the national Planning Portal.
Talk to your local planning department to see whether they would be open to a ‘change of use’. A planning application may take a long time to come through, but you shouldn’t risk completing the purchase until you have the permission.
What is a use class?
All buildings in the UK are categorised by ‘use class’ ranging from B-F or sui generis (meaning ‘anything else’), for example, residential buildings are either C1, C2, C3 or C4. Generally, if it is proposed to change from one use class to another, you will need planning permission. Housing co-operatives are sometimes counted as ‘residential’ (C3), but if there are over 6 tenants then ‘sui generis’ might be more applicable.This varies depending on the location, size and type of building. Every local authority in the UK has its own planning application system so it is a good idea to speak to your local council’s planning department.
Negotiate and Survey the Property
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Legal Transfer of property ownership to the coop
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