The Shared Ownership Scheme is a scheme to assist buyers in getting on the property ladder. This scheme allows
buyers to purchase a share of a property from a Housing Association, usually with the aid of a mortgage and rent is then
paid to the Housing Association by the buyer as well as to the lender. In most cases the buyer can at some point purchase
an additional share in the property and this is known as "staircasing up". It is usually the case that the
share being bought from the Housing Association is under a Leasehold agreement and the Lease is supplied by the Solicitors
acting for the Housing Association.
When selling a Shared Ownership property sellers can either sell their
share only or buy the remaining share at the same time as selling.
Fixed Fee Conveyancing - no hidden extras!
We have extensive experience
in dealing with Shared Ownership conveyancing and offer low fixed fees as well as first
time buyer discounts. To obtain an online quote please click here or for further information call our specialist leasehold department on freephone 0800 1071 207
(landline 0115 9247028).
FAQs about Shared Ownership
Can I make alterations to a Shared Ownership Property?
If you want to
make significant alterations, you must request the Housing Associations' written agreement to what you want to do.
This would be in addition to any statutory requirements such as planning regulations.
Can I buy further shares of the property?
You will normally be able to buy further shares
of up to 100%. However, sometimes you will be limited so that you cannot buy further shares over 80%. This would
normally have been made clear to you by the Housing Association when you purchase the property.
When is it likely that I will not be able to staircase up to in excess of 80%?
This will normally
be in certain semi-rural areas where property is particularly expensive. Cornwall and Surrey are two examples.
What do I do when I want to sell a Shared Ownership
You have to write to the Housing Association
to advise them that you want to move. You can sell the property in two ways:
By selling the part that you own;
By buying the remaining part of the property and then selling the property as a whole. You may
find this financially beneficial but you would have to judge that. However, you may have to pay
Stamp Duty Land Tax (SDLT) - see below for details.
There may be clauses in the Lease which could enable
the Housing Association to restrict the sale price to an independent valuer's valuation or to choose prospective buyers
to ensure that the property stays a Shared Ownership Scheme. These clauses are rarely enforced.
What expenses are there likely to be on the purchase of a new Shared Ownership Property?
It is necessary to get a Solicitor to deal with the legal aspect of the purchase.
If you wish to get a quote for our fees for dealing with the conveyancing please click here.
lender will carry out a basic survey but this does not deal with many structural issue or pick up issues such as damp.
If you are buying with a mortgage we have to
undertake standard searches in order for your lender to be satisfied that the property is of a satisfactory standard.
The main searches that are required are a Local Authority Search, Mining Search (if the property is in an area where there
has been coal mining).
We will also carry out a Land Registry Search (OS1) against the title to check no applications
have been made since we received copies of the deeds (£4), and Bankruptcy Search (£2 per person). See Guide to Searches for more information.
Stamp Duty Land Tax (SDLT)
This is a form of tax that is payable on transfer of a property.
This may be payable on staircasing up. Please see question below.
Housing Association Costs
The Housing Association will have Service Charge to cover the cost of insurance
and maintaining the structure of the property.
Notice to Housing Association Fee
We have to pay a fee to the Housing Association when we give them
notice of the transfer and mortgage (if there is one). Generally the fees for this would be between £40.00 and
£80.00. Generally the Housing Association will provide us with a completion statement showing the amount due once
contracts have been exchanged and we will then advise you of the same.
What services do you include as part of your fixed fees?
We offer a fixed fee guarantee.
When we deal with your Shared Ownership conveyancing we will include the following as part of our services:
Investigation of Title - This means that we check that the seller has the right to sell
the property to you.
Checking the Lease- we advise you of issues arising from the Lease
Carry out Searches - If you are buying your share with the aid of a mortgage, the
mortgage company will require searches to be carried out. Even if you are not buying
with a mortgage we would strongly recommend that searches are carried out.
See Guide to Searches for more information.
Raising Enquiries - As well as standard Law Society enquiries we also raise any specific
enquiries relating to the property.
Acting for your Lender - as well as acting for you, we are also instructed by your
mortgage lender to ensure that all their conditions can be complied with.
Completion of SDLT forms - even if Stamp Duty Land Tax is not applicable,
still need to complete
All this is included within our fees and we will not charge you extra.
What is the position in relation to SDLT on new Shared Ownership properties when initially purchasing?
You will not have to pay SDLT unless the value of the share that you are buying exceeds the level at which SDLT becomes
payable which will be £125,000.00 (or £150,000.00 if the property is in a disadvantaged area). If SDLT is
paid then it is paid at 1% on the full price paid.
You can always elect to pay SDLT on full market value.
In what circumstances should I elect to pay SDLT at full market value?
You need to bear in mind that if you staircase up to in excess of 80%, you will have to pay SDLT
at that point.
We take the following practical example to illustrate circumstance where you may wish to
elect to pay:
If you bought a 50% share in a property valued at £240,000.00 you would not have to pay SDLT
on the amount paid of £120,000.00 since this is below the limit of £125,000.00.
If you elected to pay
on the full market value then you would pay £2,400.00. If however you were not to elect and alter staircased up
to the full value and that had risen to £260,000.00 then you would pay SDLT on that amount. At current rates SDLT
is 3% at that amount and you would therefore pay £7,800.00.