By Probate Property Conveyancer Theresa Arkless
The short answer is yes, it will take longer to sell your shared ownership house.
The reason a shared ownership sale will take longer is that you are not the only person with an interest in the property. A percentage of your property is owned by your landlord, so they will need to be informed and the shared ownership procedures contained in your lease will need to be complied with.
If you own a freehold house outright, you won’t normally be reliant on a third party for any of the decision making, and you normally won’t have lease terms to comply with.
There are usually 2 ways to sell your shared ownership house:
- Sell your share
- Staircase to full ownership and sell 100% on the open market
Your options will depend on the terms of your lease as there are different types of shared ownership leases. If you are not sure of the terms of your lease your landlord should be able to provide you with some information.
Option 1: Sell Your Share
If you choose to sell your home your landlord may take over the initial marketing of your share and may be able to find or nominate a buyer. The buyer will need to meet affordability criteria and your landlord will have a set timeframe to find a buyer (8 weeks). If they do not find a buyer within that time, you may be allowed to advertise your share to the open market through an estate agent, with your landlord’s permission. Otherwise you may need to advertise 100% and follow option 2.
If your landlord finds a buyer they will have a set timeframe for completion to take place. If completion does not take place by the set deadline, you may have the option of putting your share of the property on the market.
Option 2: Staircase and sell 100% on the open market
Most shared ownership house leases will allow you to staircase and purchase your freehold, which may be more desirable to sell on than a share held on a leasehold basis. You will need to check your landlord’s requirements before you market your property. For more information see Staircasing in Shared Ownership Leases.
Whether you are selling your share or staircasing you will need your landlord to approve a value for the property, based on a valuation report carried out by a qualified surveyor. The valuation will only be valid for a set time period, usually 3 months. If the sale doesn’t complete before then, you may need get a new valuation at additional cost.
Tips for Selling Your Shared Ownership House
- Contact your landlord and make sure you are aware of your options for putting your house on the market.
- If you are not sure of a process, ask questions. Otherwise, you could waste time and money going down a route that isn’t allowed under the terms of your lease.
- Cost each option before deciding on one. If you have a term in your lease that states that your landlord can take a 1% fee for selling your share, this may be cheaper or more expensive than selling 100% with an estate agent that charges different fees.
- Be aware that if you are staircasing, you may be liable to pay Stamp Duty Land Tax (SDLT) on the FULL VALUE of your property. When you purchased your share you will have been given the option to pay SDLT up front or when you completed staircasing to 100% ownership. If you didn’t pay SDLT at the time, you will need to pay it when if you arrange the staircasing, prior to sale.
- Ask your local agents what the demand is for shared ownership housing, they may be able to tell you if a 100% owned property is more or less likely to sell than a share of a property. If you need the services of an estate agent this question will also help you assess which agent will be comfortable dealing with a shared ownership sale.
- Make sure that when you obtain quotes from a Conveyancer they are aware of the requirements of the lease. Some Conveyancers will charge extra to deal with shared ownership property due to the extra paperwork often required. This may push the price higher than a Conveyancer that would complete the work for a fixed fee.
- During the process, keep an eye on deadlines and keep as up to date with the progress as you can.
At Co-op Legal Services we can help you find some of the lowest Conveyancing fees available, and all quotes include a No Sale No Fee guarantee.