Shared ownership is a government backed scheme offered by housing associations which allows you to part-buy and part-rent your home.

If you cannot quite afford a mortgage on 100% of your home then you can purchase a percentage of your property (generally between 25% and 75%).  You then rent the part you do not own from the housing association.

CAN I BUY A LARGER SHARE OF MY HOME LATER?

The answer is yes.  This process is known as ‘staircasing’ and allows you to purchase a larger share of your home when you can afford to do so.  The price you pay will depend on the value of your home at the time.  To establish the price the housing association will value your home to determine its value.

Whilst it is possible to purchase 100% of your home you need to ensure that there is no clause in your lease which limits your share, for example to 75%.  This is quite common especially for the elderly and disabled persons.

ARE THERE ADVANTAGES OF SHARED OWNERSHIP?

Generally, as long as you meet the criteria set by the housing association, shared ownership schemes can be a great way to get on to the property ladder.  On occasion it can mean that you could purchase a larger home than you would have otherwise been able to afford.

ARE THEIR DISADVANTAGES OF SHARED OWNERSHIP?

One of the big disadvantages comes when you want to sell your property.  As you will need to liaise with the housing association it may not be possible for you to have a quick sale.  Another delay could arise if you want to make home improvements or re-decorate the property.  You will need to review your lease, as it is likely you will need to seek permission from the housing association before you undertake any home improvements.

HOW DO I SELL MY HOME?

You will need to notify the housing association.

If you do not own 100% of your home, generally the housing association will get a right to ‘first refusal’, meaning that they can chose to buy the property back.  They may also elect to find their own buyer for the property from their waiting list.

OTHER SIMILAR SCHEMES:

There are several government backed schemes available including Help to Buy, Shared Equity and Right to Buy.  These schemes are different to shared ownership and different rules and procedures apply.

MORE INFORMATION – ACTION – CONTACT DETAILS

If you are looking to purchase a property as part of a shared ownership scheme or similar, Hill & Abbott, in Chelmsford can assist.

For expert legal advice contact Laura Smith.

Telephone: 01245 253 225

Email: laura.smith@hill-abbott.co.uk