Shared ownership solicitors

Shared Ownership helps people to get onto the property ladder by enabling them to part-buy and part-rent a home. Davisons solicitors specialise in Shared Ownership conveyancing, and we are here to answer any questions you may have.

What is Shared Ownership?

Shared Ownership is a scheme that allows you to buy a percentage of a property (usually between 25% and 80%) and a housing association owns the rest. You pay rent on the portion of the property owned by the housing association.

You can gradually purchase additional shares of the property when you can afford to do so. This is called ‘staircasing’.

Shared Ownership is only available on leasehold properties.

Who is eligible for Shared Ownership?

To be eligible for Shared Ownership you must:

  • Be over 18 years old.
  • Have an annual household income below £80,000 (£90,000 in London).
  • Have a good credit record.
  • Have enough savings to afford a deposit of 5-10%.
  • Not already own a property.
  • Not have rent arrears.

The housing association may also have eligibility criteria in addition to the above, so it is important to check.

How long does the Shared Ownership conveyancing process take?

On average conveyancing takes between 8 and 12 weeks. Shared Ownership conveyancing usually takes more than 8 weeks because it involves extra checks.

Your solicitor will need to obtain the housing association’s management pack. This pack contains information about how the freehold for the property is managed including details about ground rent, service charges and buildings insurance. Your solicitor will raise enquiries on your behalf based on this information.

When purchasing a Shared Ownership property there are certain deadlines to meet. A Shared Ownership valuation expires after 3 months, which means if you do not complete your purchase within that time you will need to pay for another valuation.

Our solicitors at Davisons understand the deadlines associated with Shared Ownership and we timetable our work so that the conveyancing process is as fast and efficient as possible.

Is Shared Ownership a good idea?

Shared Ownership is a way to get onto the property ladder without overstretching your finances. When you purchase a Shared Ownership property you will not usually pay stamp duty land tax (SDLT). SDLT is only payable when you own 80% or more of a property.

You can buy additional shares in your property (staircase) when you can afford to do so and gradually increase your owned share and reduce your rent. As monthly mortgage payments are generally cheaper than rent, you may find that you have more money in your pocket each month.

There is also greater security with Shared Ownership than when you rent a property. You have security of tenure because your lease is likely to run for 99 or 125 years.

The disadvantages of Shared Ownership are that it can be more difficult to get a mortgage, as some lenders do not offer mortgages for Shared Ownership. An independent mortgage advisor will be able to help you. You also need to factor in the costs of ground rent and service charge.

As Shared Ownership properties are leasehold there are likely to be ‘restricted covenants’ in the lease. This means you may not be able to keep pets or make certain alterations to your property.

How do you apply for shared ownership?

To apply for Shared Ownership you need to register with the Help to Buy agent in your area of the country. The agent will then confirm whether you are eligible to apply for the scheme.

Will there be changes to the Shared Ownership scheme?

The current Shared Ownership Scheme will run into 2023. The scheme will then change to a new model which will run into 2026.

Under the new Shared Ownership model:

  • Buyers will be able to purchase a minimum 10% share of a property (as opposed to the current 25%).
  • A 1% staircasing model will be introduced so buyers can purchase 1% shares. At the moment this percentage is 10%, so the new model will make it easier for owners to buy more of their property.
  • The landlord will be responsible for helping the buyer towards repairs for the first 10 years of ownership.

Some properties will be available under this new model from 2022, so if you buy a Shared Ownership property it is important to check.

Have a question or need some help?

Contact Davisons Shared Ownership solicitors

Shared Ownership conveyancing is more complex than standard conveyancing because you are part-buying and part-renting a property. It is important to instruct a specialist solicitor because Shared Ownership leases often contain provisions that are not found in other leases.

Our Shared Ownership solicitors at Davisons will meticulously review the lease between you and the housing association. We will protect your interests by highlighting any restrictive covenants, making sure you are aware of housing association charges, and that you understand all your obligations.

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