Shared Ownership

There are several Housing Associations that offer their tenants or new applicants the opportunity to purchase a share in a property whilst renting the remaining share from the Housing Association at an agreed rent. This is known as ‘shared ownership’.

This option is favourable to clients that do not wish to rent a property outright but can not initially afford to purchase a property at full market value. Shared ownership provides the opportunity to initially purchase between 25% and 50% of the property and rent the remaining share from the Housing Association at the market rent. The buyer then has the option to purchase either the full remaining share from the Housing Association or to purchase another share, after an agreed time, which is usually one year. This is known as ‘staircasing’. If the buyer were to initially purchase 50% of the property and then subsequently purchase another 25% then they would own 75% and only pay the proportionate rent for 25% of the property. They would pay rent to the Housing Association until the full 100% of the property was owned outright.

The same legal requirements are still required when buying under a shared ownership option. Your legal advisor will need to consider the legal title to the property and the mortgage offer, and all of the usual requirements when purchasing any property.

Not all lenders will provide mortgage funds to a party wishing to purchase under the shared ownership scheme. However, there are some well known High street lenders that will provide this form of mortgage. We can provide contact details of a mortgage advisor that specialises in this form of mortgage.

SHARED OWNERSHIP MILESTONES

1. Consider all legal documentation received from the Housing Association solicitors.
2. Raise any legal enquiries and request any additional searches required.
3. Consider mortgage offer and deal with any specific requirements of the lender
4. Provide buyer with a draft completion statement confirming the monies required to complete.
5. Once satisfied with seller’s replies to enquires, that all searches are clear, and that the buyer and buyer’s lender are protected, invite the buyer in to the office to discuss the purchase in detail and to obtain buyer’s signature to the Contract, Transfer Deed and mortgage deed. Alternatively, a fully detailed Contract Purchase report can be sent out to the buyer if preferred.
6. Obtain buyers balance monies required to complete, agree a completion date and exchange contracts with the seller’s legal advisors. Request the buyer’s mortgage advance from their lender.
7. On the completion date, transfer the purchase monies to the seller’s legal advisors and await confirmation that the monies have been received and the keys have been released. Inform the buyer that the keys are available for collection.
8. Following completion, we are required to submit the Stamp Duty Land Transaction return form and payment to the Inland Revenue and to register the transfer of ownership in to your name at HM Land Registry.