With rising property prices the Shared Ownership scheme is an affordable way of getting onto the property ladder. It is a good option for those who are unable to borrow enough money to buy a property outright.
Intended to encourage people to own their own home through shared ownership, these initiatives allow people to buy a share of a property with the option to purchase the remaining share when their finances allow them to and own the property outright. Meanwhile they can enjoy all the benefits of home ownership without the crippling mortgage repayments required to buy outright.
Our lawyers have considerable experience in dealing with the purchase of freehold or leasehold properties from local authorities and housing associations under the shared ownership schemes that are available from those institutions.
Due to the relative complexity of the scheme there is a considerable amount of paperwork involved.
We advise you on all stages of the transaction and in particular, we report on both the individual title to the property and the terms of the lease to be granted by the housing association.
We also act for your lender so that the mortgage can be completed at the same time as the lease and purchase. After completion we register the lease at the land registry.
Subsequently we can also assist with the purchase of additional shares in the property and/or the disposal of the property.
What should you do next?
- Contact your local housing association and agree the price of the property that you can afford.
- Find a property and tell the seller or his estate agents that you are purchasing through a “Shared Ownership” scheme.
- Instruct Edwards Duthie Shamash Solicitors to deal with the purchase so that we can make contact with the housing association at the earliest possible opportunity.
- Apply for a mortgage and arrange a survey – N.B. This will need to comply with the requirements of your housing association.
- Once everything has been approved arrange to pay your deposit and we will exchange contracts for you.
- We will then complete your purchase
Please telephone our switchboard on 020 8514 9000 and ask to speak to the property team for urgent assistance.
When you wish to sell your shared ownership in the property there may be a requirement to offer it to another household nominated by your landlord (the council or housing association) for an agreed market rent. If you’ve fully ‘staircased’ your property and now own 100%, you should be free to sell it like any private property owner. Your landlord may wish to buy the property back from you to offer it to other households who want to enjoy low-cost shared ownership. They’ll tell you if they want to do this when you tell them you want to sell. The selling price is not fixed by them and the property is sold at market value, so you will benefit from any equity built up on the share you own.
How does staircasing work?
The shared ownership scheme allows buyers to purchase their property in stages. Commonly the buyer will buy a 50% share in the property and when he or she can afford to purchase a further share then a further 25% (or 50%) interest can be purchased. Once a buyer has purchased a total of 100% share in the property the shared ownership lease comes to an end and the buyer then owns a 100% interest in the property. The purchase of a property in this manner is called “staircasing”.