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Shared Property Ownership Schemes

With larger deposits demanded by lenders and high prices, many people find it difficult to raise a mortgage to buy a property outright. To help alleviate this, various affordable housing schemes have been set up by successive governments. 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 and own the property outright.

At Glanvilles, our shared ownership scheme solicitors have extensive experience in this field, having provided expert legal advice to many potential homeowners considering this option. We make sure to tailor our advice to your situation specifically, first assessing all the details of your situation in order to provide the correct solution for you.

Our team of shared ownership scheme solicitors value transparency, so when working with our specialist team, you will remain fully informed throughout the entire conveyancing process.

New Build HomeBuy

New Build HomeBuy is the latest government-backed affordable housing shared ownership scheme. Those eligible to buy under this scheme include all key workers, existing social housing tenants and those in priority housing need. Up to four people can enter into shared ownership but all applicants must jointly and individually meet the eligibility criteria.

In general terms, you are a key worker if your job is considered to be essential to your community, but you don't earn enough to afford to buy a property in the area in which you provide those vital services. For instance, you could be a police, fire or prison officer, nurse, midwife, occupational therapist or social worker or a member of the armed forces in the lower, non-commissioned ranks. Registering with your local HomeBuy Agents will confirm your eligibility and you will then receive details of the scheme together with an application form. 

For more information, visit www.helptobuy.co.uk

'Staircasing' your property

Glanvilles Home Solicitors have successfully helped many people buy their home under this Government backed scheme. As with any house buying and selling process, there are a number of rules that must be met as well as legal stages that must be undertaken.  If you're eligible you can initially buy 25%, 50% or 75% of the property value with the benefit of mortgage finance.  The outstanding share is then rented from a registered social landlord (typically a housing association or local authority) for an affordable rent.  Your outgoings therefore will consist of the affordable rent plus the mortgage repayments. However, these will be based on a much lower amount than if you'd bought outright. Glanvilles will talk you through all the stages and advise you on whether going for straight rental rather than a combined rental and mortgage arrangement would best suit your current circumstances.

As and when you have the funds, you can then buy additional shares (known as 'staircasing') until eventually you own the property outright.  The proportionate cost of those additional shares will be determined by the market value of the property at the time you decide to buy and the number of additional shares you wish to purchase.

Selling your Shared Ownership

Many people wonder about how the selling process works, and if there are any potential problems with selling shared ownership properties.

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.

However, 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.

If you have questions about the processes, or are concerned about running into any issues, our specialist solicitors at Glanville’s can help.

Frequently asked questions

What is shared ownership and how does it work?

In today’s current economy, it has never been more difficult for first-time buyers to get on the property ladder. One potential solution is a shared ownership scheme which can assist first-time buyers via a part buy/part rent scheme. Typically, buyers will purchase a percentage of the property’s total sale value, generally between 10 and 75%, later having the option to purchase more shares (this is referred to as ‘staircasing’).

When buying a shared property, you will typically pay rent to the landlord for the share they own as well as monthly ground rent and service charges, for example towards the maintenance of communal areas.

If you need support with shared ownership conveyancing, our expert shared ownership solicitors can provide all the assistance you’ll need.

What are the disadvantages of shared ownership?

Whilst shared ownership is a viable way of getting on the property ladder, it is not the correct option for everyone and does have its disadvantages.

For example, when buying a shared ownership property, you will have to pay additional charges as these properties are leasehold. Furthermore, many shared ownership properties tend to be leasehold flats that incur high service charge fees. There can also be restrictions on the various alterations you can make to your property, such as adding or removing walls. It can also be more difficult to get a mortgage, as not all lenders offer Shared Ownership Mortgages.

Is Shared Ownership the same as renting?

No, shared ownership is not the same thing as renting. This is because shared ownership involves purchasing a share of a property with the help of a mortgage, whilst the remaining share is owned by a developer or a housing association.

The buyer will then pay rent on the portion of the home that they do not own. Further down the line, the homeowner will have the option to purchase more shares in the property, which is called ‘staircasing’. Renting involves paying a monthly amount to a landlord without having any stake in the property.

Is shared ownership expensive?

How expensive a shared ownership property is will be dependent on many factors, including property market conditions, location and the size and value of the home. Shared ownership is generally considered an affordable option for homebuyers who could potentially not afford to purchase a property in the typical way.

Whilst shared ownership typically requires a smaller deposit and mortgage, it can incur extra costs such as ground rent, maintenance fees and service charges, so it is important to be mindful of this when considering going down this route.

Can I buy a bigger share of my shared ownership property?

Yes, overtime you will be given the opportunity to purchase more shares in the property, a process which is known as staircasing.

How can our shared ownerships solicitors help?

Our shared ownership solicitors have assisted many homebuyers through this process, providing expert advice tailored to your situation. If you are considering buying a shared ownership property or have already purchased one and are looking to purchase more shares, we can help.

When it comes to shared ownership conveyancing, it is highly recommended to have the support of experienced shared ownership solicitors. Our team can help you with the various legal intricacies and to avoid the potential pitfalls of the process.

We will be quick to assess your situation and help you to decide if shared ownership is the best option for you. Should you decide to go ahead, our specialist team will work with you to ensure that the process goes as smoothly as possible whilst keeping you informed at every stage.

Get in touch with our shared property ownership solicitors in Chichester, Fareham and Havant

You can contact our local Glanville’s office in ChichesterFareham or Havant or use the contact form below and we will get back to you quickly.