Understanding Shared Ownership

This government scheme allows buyers with a household income of less than £80,000 (£90,000 in London) to buy just a portion of a home from a housing association. The scheme is available on new build homes and existing properties. Usually the minimum deposit needed is 5% on the share of the property that you are buying, meaning smaller deposits and mortgages. Buyers then pay rent to the housing association on the remaining portion of the property.

Over time, you can choose to purchase more of the property through a process called “staircasing.” This gives buyers the opportunity to eventually own up to 75% of the property. Some housing associations do allow people to buy up to 100% – but not all – so this is something you would need to consider, especially if 100% ownership is your end goal. It is also worth noting that there are legal costs to pay each time you staircase up, and in some cases there may be a limit on how many times you can buy shares in the property. 

This scheme is particularly beneficial for first-time buyers or those unable to secure a large enough mortgage for a property.

All shared ownership properties are leasehold, , even houses, which may be a drawback to some buyers. It is common as a result that owners of shared ownership properties have to  pay monthly services charges and ground rent, so this all needs to be considered in terms of affordability. 

Also, if you wanted to sell your share in the property this generally has to be done via the shared ownership scheme and not as a regular sale on the open property market. Only buyers who meet the criteria would be able to purchase the home so this may limit any pool of potential buyers.

Why Shared Ownership Conveyancing expertise is Crucial

The process of shared ownership conveyancing involves specific legal and procedural steps that differ from a standard property purchase. Making sure your conveyancer is experienced with shared ownership purchases is important to ensure a smooth transaction. Here’s why:

• Expertise in Shared Ownership: Shared ownership agreements come with unique legal requirements and stipulations that you wouldn’t find in a regular leasehold conveyancing transaction. A specialist conveyancer understands these differences and ensures all aspects of the transaction comply with current regulations and the shared ownership scheme conditions. 
• Mortgages: The mortgage has to be approved by the housing association and mortgage lenders tend to have more stringent requirements in respect of shared ownership cases. The housing association you are buying through will usually have a list of conveyancing solicitors that they would recommend for this type of transaction. 
• Efficient Transaction Management: The process involves various stages, including verifying lease terms, conducting property searches, and negotiating contract terms. An experienced conveyancer will manage these stages efficiently, reducing the likelihood of delays or issues and keeping you informed every step of the way.

The Conveyancing Process for Shared Ownership

1. Instruction: Begin by consulting with a conveyancer who has experience in shared ownership transactions. They will explain the process, assess your needs, and provide an overview of what to expect.
2. Offer Acceptance: Once your offer on a shared ownership property is accepted, your conveyancer will review the lease agreement and ensure the terms match your requirements.
3. Property Searches and Surveys: Conducting thorough searches and property surveys is essential to uncover any potential issues. Your conveyancer will order these to ensure there are no hidden problems with the property or surrounding area.
4. Contract Negotiation: your conveyancer will negotiate the terms of the lease and purchase agreement with the housing association, ensuring that all conditions of the shared ownership scheme are accurate in the contract.
5. Completion: On completion day, your conveyancer will handle the final steps of the transaction, including the transfer of ownership. They will ensure that all legal actions are completed and that you receive the necessary documentation.
6. Post-Completion: After completion, your conveyancer will address any remaining tasks and make sure that all documents are correctly processed.

If shared ownership is not right for you but you still need help getting on the property ladder there are other schemes out there. If you are a first time buyer you might want to consider the Government’s First Homes Scheme which allows you to buy a new home from a developer for 30% – 50% less than the market value. These differ from homes bought via the Shared Ownership Scheme as you do not pay additional rent alongside your mortgage. 

To buy a home using this scheme it has to be a new build property and it cannot cost more than £250,000 (or £420,000 if in London) after the discount. You must be a first time buyer not earning more than £80,000 a year before tax (£90,000 if you are in London) and you are able to get a mortgage for at least half the cost of the property. 

For more detailed information or to get started with your residential conveyancing, contact our experienced team today. We’re here to provide expert guidance and support throughout your home-buying journey.