Shared Ownership Solicitors

Shared ownership is when one or more individuals purchase a share of a property and then pay the remainder to a landlord as rent. This option is done through the shared ownership scheme and is an alternative for those who cannot afford the deposit and mortgage payments required. Our shared ownership conveyancing solicitors will explain every detail of this process to you clearly and will be able to tell you clearly whether this is a suitable option for your specific situation.

In general, shared ownership schemes are used to assist first-time buyers or those with limited finances but still wish to be homeowners. To be eligible (this varies for each case) you will generally be required to have a household income, be a first-time buyer, be unable to afford full ownership, meet local residency requirements (for example, already living in the area/working in the area) and be at least 18 years old

Depending on the circumstances, individuals may also be required to prove they have a positive credit history.

When considering buying a shared ownership property, it is important to first check the list of criteria to make sure that you are eligible for the shared ownership scheme. After you have verified this, you can begin searching for available shared ownership properties and arrange a viewing. Should you find this difficult, our shared ownership solicitors will be happy to help you with your search.

When you eventually find a property on the shared ownership scheme, you will be required to submit an application – this can also require financial documents. Once the property has been valued, you will then receive an offer which will tell you the share that you can purchase, how much it will cost and the monthly rent on the remaining share. Should you accept this, you will then need to secure a mortgage and engage an experienced shared ownership solicitor to handle the conveyancing process. Upon completion, you will then be responsible for service charges and rent.

Our shared ownership solicitors can also inform you about how to incrementally increase your ownership through the use of ‘staircasing’. Staircasing is the process of gradually increasing the amount of shares you own in the property when you do so you will pay less and less rent with each share purchased. All homeowners on the shared ownership scheme are entitled to purchase additional shares, normally in blocks of 10% or more.

You are entitled to ‘staircase’ as many times as you want, however, it should be noted that doing so incurs various fees, so it is often wiser to purchase shares in large amounts rather than many small blocks.

Typically, shared ownership properties will be leasehold, meaning that the homeowner owns the property for a specific amount of time (known as the lease term) but doesn’t have ownership over the land that the property is on. This land is usually owned by a housing association or developer.

The leasehold is structured this way to ensure that the property continues to be affordable and to aid in the management of communal areas. Lease terms for shared properties are commonly set at 99 or 125 years, however, this can vary from case to case. The details of lease agreements can be relatively complex, which is why it is essential to have access to an experienced shared ownership solicitor to help you review the agreement and to inform you of your obligations and rights as a leaseholder.

If you are considering selling your shared ownership property, the process is slightly different from if you owned the property outright. Firstly, you will have to contact your housing provider to inform them that you wish to sell the property.

Traditionally, your provider will have two months to begin marketing your home to potential buyers, and if they find one, they will go through the same process as the one that you originally went through when buying the property. However, if your provider is unable to find a buyer during this period, you are then permitted to sell your property privately or through an estate agent of your choosing. As part of this process, you will need to have the home valued, as well as paying the fee for this.

If you wish to proceed with the sale, you will be required to complete and return a contract of sale, as well as including details of the shared ownership solicitor who will represent you should a buyer be found. In the case that you bought your shared ownership home with someone else, both individuals will be required to sign the contract of sale.

If you are a first-time buyer, when you purchase a shared ownership property you will be given the option of paying Stamp Duty on the full value of the property, as if you were buying outright.

Alternatively, you can choose to only pay Stamp Duty on the share that you are purchasing. There are pros and cons to both of these choices, the advantage of the former being that you will never have to pay stamp duty again for this property, even if you go on to purchase the entire property through staircasing, with the disadvantage being the large initial cost.

For the latter, the advantage is the low cost at the beginning of the transaction, with the disadvantage being that as the property’s value rises, the stamp duty will likely increase as you begin to purchase more shares of the property later on.

Which option you decide on depends entirely on your specific situation, for those with a small income the latter may be the better option as you may not be able to afford the initial large cost of stamp duty for the entire property. Our shared ownership solicitors are experts in this field and will take the time to discuss with you in detail what the best possible options for you are.