Shared Ownership - Help to Buy
What is shared ownership?
Shared ownership was introduced to help people who cannot afford to buy a home outright. Through shared ownership, you buy a share of the property and pay rent to the Society on the share you do not own. You may buy further shares and eventually (in most cases) own your home outright.
Who can buy through the shared ownership scheme?
The scheme is intended for people who cannot afford to buy a home in the usual way, but who do not qualify for subsidised rented housing.
Although you have not bought the whole of the property, you will have all the normal rights and responsibilities of a full owner-occupier. You should take legal advice before committing yourself to any purchase.
How does shared ownership work?
The scheme allows you to purchase a share of a property from an existing sharing owner. (Rarely, a new scheme may be developed, in which case you will buy direct from the Society.) The share you buy is funded by a mortgage which you will need to arrange with a bank or building society. The remaining share you do not own is rented from the Society.
The size of the share you buy will depend on the share available for sale, but is usually 50%. Occasionally, it will be 25% or 75%. The higher the share you purchase, the less rent you will have to pay. You will also have to pay a service charge. Later on, if you wish and can afford to do so, you can buy a further share. Under no circumstances will the Society buy your share back from you.
When you purchase under shared ownership arrangements, you will acquire a lease which sets out your rights and responsibilities.
What does the shared ownership lease entitle me to?
Your lease will entitle you to live in your home as an owner-occupier. It will also entitle you to buy further shares in the property and sets out how you can do this. It also states that you can sell your property, to a buyer approved by the Society.
Other points covered in the lease set out your responsibility for repairs and payment of rent and service charge. Although you have not bought the property outright, you will have the normal rights and responsibilities of a full owner-occupier.
What services are provided?
Depending on the location and the lease, any or all of the following services are provided at our shared ownership sites
- Caretaking of communal areas
- Gardening of communal areas
- Lighting of communal areas
- Refuse collection
- Insurance of the building (but not contents)
- Maintenance of communal TV aerial
- External decorations
- Payment of ground rent to the superior landlord (if any)
Selling your shared ownership property
If you are a shared owner it is easy for you to move on by selling the share you own. You can do this by assigning your shared ownership lease to another party. Assignment is the term used to describe the transfer of the lease to another person(s).
You must tell us if you wish to sell before you look for a purchaser. This is because we may have the right to nominate a person to buy your share.
You will also need to obtain an open market valuation of your property so that we can agree the maximum sale price for your share. This will normally cost around £150-£200 and needs to be from a RICS (Royal Institute of Chartered Surveyors) trained valuer, an Estate Agents valuation will not suffice. Valuations are only valid for a 3 month period, you may have to ask your Valuer to relook at his valuation or revalue your home if the process goes beyond the 3 month period.
Once the sale price has been agreed your property will be marketed on the Help to Buy Agents website in order to help you find a purchaser.
You will have to instruct a solicitor to act in the sale of the property for you once you have found a purchaser. Solicitors fees would normally be around £600.