Buying a Shared Ownership Property
18 July 2017
If you are interested in buying a shared ownership property, you can find more information about where to find shared ownership property on the gov.uk website. You may also see shared ownership homes advertised with your local housing association, by developers of new build homes or with your local estate agents.
In certain circumstances shared ownership leases are created on homes already built. Certain groups of people can apply to buy the property on a shared ownership basis. There may schemes available through a Local Authority, local builder, a local housing association or through the government.
But most of the time shared ownership leases are created on new homes. When new homes are built or properties are developed (such as when buildings are converted into flats) the Local Authority may insist in the planning permission that a certain percentage of homes are designated as ‘affordable housing’.
These affordable homes will need to be sold to a local housing association, the Local Authority or other specified party so that they can be offered to people at an affordable level. This will either mean that the Local Authority or housing association rent these homes at an affordable rate, or that they are sold as affordable homes. To make the property affordable to buy, the property will usually be sold for a fraction of the value on a shared ownership basis.
If you have found a shared ownership property that you are interested in buying, you will need to meet the lease requirements, and you will need a Conveyancer to act on your behalf. It’s also likely you’ll need to comply with affordability requirements, so you’re income can’t be over a certain threshold.
- It’s worth noting the following points when buying a shared ownership property:
- Even if the shared ownership property is a house, it will be leasehold and you will need to comply with the terms of the lease
- Some leases won’t allow you to keep buying more shares in the property (known as ‘staircasing’) up to 100% ownership. So if your goal is to own the whole property, check the terms of the lease
- You usually can’t sublet the property until you’ve staircased to 100% ownership (if the lease allows you to)
- You will have to pay rent on the portion of the property you don’t own
- If you fail to pay your rent your landlord could bring legal proceedings against you and take back your share
You will need to instruct a Conveyancer to deal with the purchase. You may be recommended a Conveyancer who has dealt with other shared ownership properties as they will be familiar with the terms. Due to the nature of the purchase this is likely to take longer than a purchase of a standard home, especially if the property is newly built.