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A Local Home is a home which can be purchased by local people and is more affordable, because it is sold with a discount off the open market value.
North Norfolk District Council is an attractive place to live and work, but this attractiveness also means that across the district 10% of all homes are used as second or holiday homes. In some parts of the district nearly 50% of all homes in a village are second or holiday homes. This has an impact on house prices and makes it harder for people with local connections to North Norfolk to buy a home which meets their needs in their local area and they often have to move to cheaper areas to buy a home.
To address this issue, the Council has committed to upholding the Section 157 restriction on properties which were sold by the Council through the Right to Buy as they provide a pool of more affordable homes to people who have connections to Norfolk of residence or employment.
The Council is also working with communities, developers and Registered Providers (Housing Associations) to provide Local Homes to help people buy a home in their local area.
What is a Local Home?
A Local Home is a home which can be purchased by local people and is more affordable, because it is sold with a 20% discount off the open market value.
The 20% discount remains on the property and it can only ever be sold for 80% of the open market value. This means that all future buyers will also benefit from the scheme.
What is open market value?
Open market value is a term which describes the value of a property where there is a willing buyer and a willing seller and there are no restrictions on who can purchase the property.
Local Homes must be sold with a 20% discount on the open market value which is 80% of the open market value.
The open market value will not necessarily be the value which an estate agent states the property should be marketed for sale at. For all sales of Local Homes a formal valuation by a member of the Royal Institute of Chartered Surveyors of the open market value will need to be provided to the Council. This will allow the Council to verify that the sale price of the Local Home is 80% of the open market value.
Who is eligible for a Local Home?
The eligibility criteria for a Local Home is set out below.
Local Homes must only be sold to a buyer who:
- Has lived or worked in the North Norfolk District Council area for at least three consecutive years at the point when they decide to buy the home OR
- Are a key worker (in the health sector, education or public sector) who work in or have accepted a job offer to work in that part of the North Norfolk District Council area which is within the Area of Outstanding Natural Beauty.
Local Homes must not be used as a second home or holiday home, only as the main home of the buyer or, if the property is rented, the tenant.
How does it work?
- A new home will be marketed for sale as a Local Home.
- Potential buyers who meet the eligibility criteria will be able to buy the property at the discounted price.
- To ensure that Local Homes are only sold to buyers who meet the eligibility criteria, a restriction will be placed on the title of the home which requires North Norfolk District Council to approve all sales. Where the home is being sold to a buyer who meets the eligibility requirements at a price which is no more than 80% of the open market value the Council must approve the sale.
How can I find a Local Home?
There is currently a restricted availability of Local Homes. Details of Local Homes for sale will be advertised on this page when they are available.
You may also be interested in purchasing a property subject to the Section 157 restriction. The restriction applies predominately to the rural villages and small towns across the district to properties which were sold by the Council through the Right to Buy. The sales particulars should state when the Section 157 restriction applies, although, if not the vendor or estate agent should advise of this at the earliest opportunity.
Will I be able to get a mortgage on a Local Home?
Some lenders may not lend on a Local Home as the restriction on the home will limit the pool of buyers who are able to buy the home. However, the restriction will have very similar wording to the Section 157 restriction which applies to homes the Council sold to tenants through the Right to Buy from 1980 to 2006. There are a large number of former Council homes subject to the Section 157 restriction and buyers are able to secure mortgages on these properties.
Please note however, that if a buyer has a small deposit or is borrowing a large amount in relation to their income, this will limit further the number of lenders who will lend and therefore these buyers will find it much harder to find a lender who will give them a mortgage on a Local Home.
What happens if someone wants to buy my Local Home who does not meet the criteria or I cannot find a buyer who is eligible to buy?
It is at the Council’s discretion whether or not to allow a sale to someone who does not meet the eligibility criteria.
The owner or potential buyer of a Local Home can request that the Council uses its discretion to approve a purchase to someone who does not meet the terms of the restriction. Requests can be made:
- Based on the personal circumstances of the potential buyer and the length of their connections to the North Norfolk District Council area by residence or work OR
- Because the property has been marketed as a Local Home at a price which is not more than 80% of the open market value for a period of at least 12 months.
The Council will consider each request on a case by case basis taking into account the circumstances of the case and the factors shown above. The Council will not use its discretion to allow a sale to a non-eligible buyer if the sale price will be higher than 80% of the open market value. Where the Council agrees to approve a sale to a buyer who does not meet the eligibility criteria, the Local Homes restriction will remain on the property and apply to all future sales.
The process of making a request for the Council to use its discretion will be the same process as is used to make a request to waive the Section 157 restriction on a former council property.
Will there be any restrictions on making changes to my home or how I can use my home?
The only restrictions on a Local Home are who the property can be sold to and the percentage of open market value that the house can be sold for. Also, a Local Home cannot be sold to anyone who wants to use the property as a second or holiday home, the buyer must use the property as their main home. If the owner wants to rent the property out in the future, the property must be rented to someone who would be eligible to buy the home and who will use it as their main home.
Living in a Local Home will not prevent you making changes to the property or carrying out repairs or maintenance and you will not need the Council’s consent to make any changes. However, you may need the consent of your lender to make changes and some changes may need planning permission or building regulations consent.
What happens if the value of my Local Home changes - will I be out of pocket?
A Local Home cannot be sold for more than 80% of the open market value of the property. If the value of a Local Home changes, the value of the proportion of the home that you own will change:
For example, a Local Market Home has an open market value of £200,000 and it is purchased by Ms A for £160,000 (80% of the open market value).
Four years later, Ms A wants to sell the property, she has the property valued and it has an open market value of £215,000. Ms A sells the property to Mr B for £172,000 (80% of the open market value). Ms A sells the property for £12,000 more than she paid for it four years ago (as she paid £160,000 to buy the property).
Five years later, Mr B wants to sell the property but the value has gone down as house prices have fallen. Mr B has the property valued and it has an open market value of £205,000. Mr B sells the property to Mr and Mrs C for £164,000 (80% of the open market value). Mr B receives £8,000 less than he paid for it five years ago (as he paid £172,000 to buy the property).
If the property in this example had not been a Local Home and Mr B had owned 100% of the value of the property, he would have sold the property for £10,000 less than he paid for it as the original open market value when he bought it from Ms A was £215,000 and he sold to Mr and Mrs C for £205,000.
What happens when I want to sell my Local Home?
Firstly, you will need to arrange for a formal valuation of the property by a member of the Royal Institute of Chartered Surveyors. Once you know what the open market value of the property is you can market it for sale at 80% of this value. You will need to be clear when marketing the property for sale that the property is subject to a restriction which means that the property can only be sold to a local buyer at a price which is no more than 80% of the open market value. When a potential buyer offers to buy the property you will need them to confirm that they meet the eligibility criteria for a Local Home and that they will be able to provide proof of their eligibility.
Once solicitors have been instructed on the sale of the Local Home, the buyers solicitor will contact the Council’s legal team to formally request consent for the sale. Without the Council’s consent the sale cannot be completed as it will not be able to be registered by Land Registry without the Council’s formal consent. The buyer's solicitor will provide the confirmation of the Council’s eligibility to the Council’s legal team. The seller’s solicitor will provide a copy of the valuation of the property and confirm that the sale price is no more than 80% of the open market as determined by the valuation. The valuation should be no more than 8 months old when the request to the Council to approve the sale is made.
What happens if I want to rent my Local Home?
You will not be able to rent out your home as a holiday home. The restriction will not prevent you taking in a lodger or renting out the whole property. If you rent out the whole property this must be to a tenant who meets the eligibility criteria for a Local Home. You do not need to get the Council’s consent to rent to a tenant who meets the criteria but must have checked that the tenant is in fact eligible.
If you are unable to find a tenant who meets the eligibility criteria to purchase a Local Home, you can request that the Council gives consent to allow you to rent the property to a tenant who does not meet the terms of the restriction. The process for making such a request is the same process which applies to properties subject to the restriction, for further information on this process please see the Section 157 restriction page.
You may need your lender’s consent to rent out your home and will need to notify your insurance company of the change of use.
Can I buy a home with my partner if they do not meet the eligibility criteria?
Yes, as long as the person who meets the eligibility criteria is on the deeds (will legally own the property). Where it is proposed that the person who meets the eligibility criteria will not own the property, the Council will not be able to approve the purchase of a Local Home.
Are there any occasions when the Council’s consent is not needed for a change of ownership?
If a property is being transferred from joint ownership to sole ownership (or vice versa) or is inherited as a result of a will or intestacy, the Council’s consent may not be required. If in doubt, please contact the Council’s legal team for more information.
Area of Outstanding Natural Beauty (AONB)
To check if you currently work in that part of the North Norfolk District Council area which falls within the Area of Outstanding Natural Beauty please use these online maps Norfolk Coast AONB and Parish Boundaries. Please note that these maps do not show the district boundary as they show the full Area of Outstanding Natural Beauty.
A map showing all the parishes and wards in the North Norfolk District Council area. The ward boundaries will change in May 2019 but the parish boundaries will not be affected.