A FIRST STEP ON THE PROPERTY LADDER

Shared ownership is a scheme initiated by the Government to help first time buyers establish themselves on the property ladder. In such a scheme, the buyer shares ownership with a Housing Association or developer. Shared Ownership means what is says, namely sharing ownership; it does not involve sharing occupation of a property with other people who live in the same property such as friends or family.

Such schemes are not available for every property; they are only available in connection with a relatively small number of participating developments.

Shared Ownership is the main affordable Housing Scheme and is an excellent way into home ownership for those who would otherwise not be able to get a foothold on the housing ladder. If you cannot afford to buy outright, you buy only a part of the ownership of your property, and you rent remainder.

The share you can buy is usually between 25% and 75%. You can take out a mortgage to buy your share or pay for it with savings. You’ll also need to pay a deposit, usually between 5% and 10% of the share you’re buying.

Usually, you initially but at least 25% share in the property under a long lease. You then pay market rent on the share that you have not bought. This has the consequence that the larger share you buy, the less rent there is to pay.

When the time comes when you can afford to buy a greater share of the property, the lease provides that you can do so. You have the right to acquire further shares in the property based upon the market value from time to time. These shares, depending on the terms of the lease, can be as small as 10& in some schemes.

If the time comes when you have purchased 100% share in the property, you can then have the freehold of the property transferred to you without having to pay any further price. If. In the meantime, you wish to sell your part-share of your home, you can do so as any time, as long as you can comply with the procedures laid down in the lease by the Housing Association or developer.

Mortgages are available from certain lenders for the purchase of the initial share and for subsequent shares.

All our conveyancing solicitors at Nicholson Portnell are familiar with such schemes and would be happy to assist you more fully if you chose this way of entering the housing market.