6. Shared Ownership Schemes

We are able to give clear and simple advice both on the procedures involved and also act for you in connection with the purchase and any related mortgage.

The purchase of your home is probably the largest financial transaction you will ever undertake.

Initially, it may seem to be a daunting prospect with numerous forms to complete and terms with which you may not be familiar. We understand this and will aim to make the process painless and straightforward. It is our policy to deal with your matter quickly and efficiently to ensure that you complete your move with as little stress as possible.

If you are buying with someone else, we can advise as to whether or not you should buy as joint tenants or tenants in common and if it would be appropriate for there to be a trust deed.

Shared Ownership Schemes provide that the owner of the property, who is often a Housing Association, will grant to you a lease of part of the property and rent the remainder to you.

Initially, you will take a specific percentage share of the property which you are leasing.

This is usually in 10% or 25% tranches. The Scheme provides that at a later date, when you are financially able to do so, you can buy additional shares of the property with the intention that eventually you will own 100% of the property.

There are often restrictions on who you can sell the property to or the manner in which such a sale can be effected. It is common for you to be required to offer to sell the property back to the Housing Association or to somebody they nominate before placing the property on the open market.

There is generally a fixed period for a housing association to decide whether they wish to buy the property or nominate someone to do so. If they do not do this within the fixed period then it is usual for you to be able to sell it. The exact terms as to how this procedure works will be set out in the lease of the property which will be granted to you.

We will advise you as to exactly what clauses are included in your lease and there effect.

When you wish to buy additional shares in the property, you will need to contact the Housing Association. They will then carry out a valuation of the property.

The purchase price which you pay for the additional share is based on the then current market value and not on the value of the property as at the date when you made the original purchase.

This process is known as the stepping provisions.

The government has been very keen to extend this form of buying property, for example introducing provisions whereby shared ownership properties are only sold to key workers.

It is usual for the purchaser to obtain a mortgage for the part of the property which they are going to lease.

They will then pay normal mortgage payments on this part and pay rent to the landlord in respect of the part which they have not bought. In addition it is usual to pay a form of service charge to cover the cost of the landlord insuring the property and, in some cases, maintaining the main parts of the property including common parts if it is a flat.

Following the purchase of a property, it is always advisable to consider making a will and we can advise you on this and prepare it for you.