Shared Ownership - Resales
What are shared ownership resales?
When any existing part buy part rent (shared owenership) home becomes available for resale, you can buy the share from its current owner. The shared ownership homes vary greatly in terms of age, size and type. Whether buying a new shared ownership home or resale property you will follow the same process highlighted in our buyers guide here. Alternatively if you are selling a shared ownership resale property you can view our sellers guide here.
How does it work?
Just like shared ownership new homes, homes are available through different housing associations. You can buy shares worth between 25% and 75% of the property's market value and you pay a subsidised rent on the remaining share. You may need to raise a mortgage to purchase your share. If you have a large deposit or equity from the sale of a property, this can also be used towards purchasing your share.
Shared Ownership new homes are also available from direct from the housing associations. More information can be found in the new homes section.
Who can apply for this scheme - Eligibility?
Whatever the scheme - all the HomeBuy options available require you to fulfil the same basic eligibility criteria. These include:
- You have a gross household income of no more than £66,000 per annum when eligible to purchase or rent a one or two bedroom home or no more than £80,000 per annum when eligible to purchase or rent a family sized home (three or more bedrooms). A Lower income threshold may apply to some developments, and please not bonuses and other sources of income will count towards your total income.
- Applicants should be buyers looking to buy for the first time, although if you are looking to buy a new home after a relationship breakdown you may also be considered
- You must be in full or part time employment or be able to demonstrate you can afford to maintain the costs of owning the home long term. Student loans, bursaries or similar funding sources are not accepted.
- Priority will be given to armed forces (MOD) employees, and social tenants
- You should ideally have either family or work connections to the area in which you want to buy
- If you wish to purchase a property in London often priority for particular properties is given to those who currently reside in the same borough as the development, property details will stipulate this.
- You should be a British or EU/EEA citizen, or have indefinite leave to remain in the UK. If you do not have indefinite leave to remain it is possible to apply by be aware that you may have difficulties in obtaining a mortgage. If unable to be approved for a mortgage you will NOT be able to proceed with the purchase.
Before purchasing you will need ensure you have:
- A good credit history, so you stand a good chance of being approved for a mortgage.
- Have the funds required for the deposit, the amount will be depedant upon the cost of the share you buy, your credit rating and your mortgage lender's requirements.
- Be able to raise around £4000, which is the average cost of buying which covers the additional costs of mortgage arrangement fees, solicitor's fees, moving costs etc.
For Eligibility Criteria and aplication details click here.
How to I register my interest in the shared ownership schemes?
Simply log your interest for properties that will be re-let. Properties bought via the re-sale route can usually be purchased through Shared Ownership or on an outright basis. Please ring a member of the relevant housing associations sales team advertising the shared ownership property for more information or you can fill out application forms selecting shared ownership re-sales as the scheme. Supporting documents are required (three months wages slips or a p60).
What are my options after buying through shared ownership - resales?
You can buy additional shares at a later date until you own 100%, if you wish to. This is called staircasing and the cost of the additional shares in the shared ownership property is based on the market value of the property at the time that you purchase the shares. If you increase your share in the property, your rent is re-calculated and reduced proportionately. If you wish to sell your property, your share is marketed for sale by your housing association to allow other people in housing need to benefit from low cost home ownership. The property is resold at the market value of the property at the time of resale.
Staircasing
Did you buy your home through shared ownership?
If you have purchased a share of your home under the Shared Ownership or previously the NewBuild HomeBuy scheme, you are entitled to buy further shares if you can afford to. This is known as "staircasing".
What is staircasing? - for more information see our detailed explanation of Staircasing.
You don't need to buy 100% of a shared ownership home. You can acquire more shares in your home in small, manageable chunks. And you may be interested to know that buying outright may not cost as much as you think. In many cases, the cost of monthly payments on a 100% mortgage are only marginally higher than the combined shared ownership mortgage and rent you currently pay. We're working with independent financial advisers, with experience in shared ownership to offer you free, impartial advice on buying more shares in your home. Though you will need to pay for a valuation and legal fees, there are lots of competitive deals out there at the moment to encourage outright ownership. So why not get in touch with your housing asssociation and find out about owning the whole of your home?
Selling Shared Ownership Resales
It is possible to sell your share at any time, therefore exiting the shared ownership lease and its contractual obligations. Initially the procedure for selling your share in a shared ownership property is the same as for Staircasing in that a full Open Market RICS Valuation must be obtained in order to assess the value of your share in the property. The housing association then needs to approve this valuation before any marketing can be done on the property. When the valuation is approved, the housing association will confirm the selling price for your share. One thing you need to be aware of is the housing association has a nomination period in which they are contractually entitled to market shared ownership resales property for the initial 8-12 weeks varying on contracts. In this period they may nominate a potential buyer from their shared ownership nomination waiting list and market as they see fit. Only if the housing association cannot find a buyer are you as the seller entitled to sell on the open market. For a more detailed explanation of this please see our Shared Ownership Sellers Guide here.