Guide To Buying A Shared Ownership Property
- What is shared ownership?
- How much can I buy?
- Buying a Leasehold Retirement Property.
- Costs of buying
- Do I pay rent?
- What are the main provisions in the lease?
- What happens when I want to sell?
- Who benefits from any increase in value when I want to sell?
- Will I be able to keep a pet?
What is shared ownership?
Shared Ownership is a flexible alternative to renting or buying a property. It is especially suitable for those people whose regular income would not enable them to get a mortgage large enough to buy a property outright. It is a particularly attractive option for people buying their first home, someone leaving their owner occupied home as a result of a relationship breakdown, or others who find local house prices beyond their means.
How much can I buy?
With Shared Ownership you have the option to buy either 25%, 50% or 75% of the market value of a shared ownership property and pay a rent on the remainder (ie the percentage you have not purchased). The minimum share you can purchase is 25% of the full market value. Please note some of our Leasehold Retirement Properties have only 70% shares available.
What is Staircasing?
This is the process by which you can increase the shares of the property you own. Please click here for further information on buying more shares.
Can I purchase outright?
You may be able to purchase outright at some of our shared ownership schemes, but this will depend upon the terms of the lease. If you purchase outright, you will acquire the freehold of the property if the property is a house. If you own a flat you will continue to pay the service charge, but will not be able to acquire the freehold. You cannot purchase a Leasehold Retirement Property or a Retirement Shared Ownership property outright.
Buying a Leasehold Retirement Property
Applicants must normally be at least 55 years of age (although some leases stipulate 60 as the minimum)
Couples are eligible to buy if one partner has reached the minimum age. Some of the benefits of buying a Leasehold Retirement Property include:
- Peace of mind
The people who buy our retirement homes may have decided that their present home is becoming too much of a burden for a variety of reasons. - Security
Some of our residents are reassured by the security of being able to call for help 24 hours a day in an emergency. - Independence
To buy one of our homes, you must be able to live independently. Please note that we do not provide nursing care or continuous day-to-day domestic assistance. - Low cost– Value for Money
Many of our homes are subsidised by a government grant. - Quality Housing
We provide quality housing of a high standard. All our new build properties hold an NHBC 10 year guarantee.
Costs of Buying
If you are buying a leasehold or shared ownership property which is not brand new there will be no need to pay a deposit.
If you are buying a brand new leasehold or shared ownership property you will usually be asked to pay a reservation fee in order to secure a specific plot.
As there may be up to 3 solicitors involved in the sale of some of our properties, you may be required to pay our legal costs as well as some of your own.
There may also be a requirement to pay Stamp Duty.
If you require a mortgage you will need to pay mortgage arrangement charges to your lender.
Do I pay rent?
If you buy one of our Shared Ownership Retirement properties and purchase a 25% or a 50% you will pay a rental fee. If you purchase a 75% share you will pay no rent. Similarly, if you purchase one of our Leasehold Retirement properties at a 70% share you will pay no rent
Please click here for further information on Paying your rent and/or Service Charge.
What are the main provisions in the lease?
Shared Ownership properties are sold on a 99-year lease. The Lease sets out the various rights and obligations of the landlord (‘the Trust’) and the Leaseholder (you). A number of important points usually contained in the Lease are summarised below, for guidance:
Rent & other charges
The Leaseholder is responsible for payment of the rent, council tax, and a contribution towards any common costs, e.g. unadapted roadways (if applicable). The Leaseholder is also responsible for undertaking all necessary interior and exterior repairs to their property.
Insurance
The Trust is responsible under the terms of the Lease for insuring the property against loss or damage by fire and such other risks as the landlord may reasonably determine. The cost of providing insurance cover is charged in addition to the rent.
Management
The Trust levies a management fee, for performing its obligations under the Lease. The management fee is no longer payable after Leaseholders acquire the freehold.
Repairs & Maintenance
The Leaseholder is responsible for either the interior or interior and exterior of the property dependent on the terms of the lease. For more information please refer to Repairs & Maintenance.
What happens when I want to sell the property?
In the event that you wish to sell your property, you should let us know in writing and we will undertake to find a purchaser for your share, from our waiting list. If we are unable to locate a suitable purchaser you can consider advertising it through a local Estate Agent. This is no different from moving when you own your home outright and the process will incur similar expenses.
Who benefits from any increase in value when I want to sell?
As the Shared Owner, you will benefit from a share of any increase in the value of the property. For example if the property value has increased by £5000, and the percentage share you own is 50%, the value of your share will have increased by £2500. It is important to point out however, that house prices can fall as well as rise. If this should happen, you would similarly bear a share of the loss.
Will I be able to keep a pet?
Your lease will indicate whether a pet is allowed. If you want to keep a dog, cat, or other animal, you should discuss this with one of our Housing Managers when they interview you. If the property you are interested in has its own access and garden, you may be able to have domesticated pets, as long as they do not disturb neighbours.
