SHARED OWNERSHIP – VALUATION

SHARED OWNERSHIP

You can buy a home through the shared ownership scheme if you cannot afford all of the deposit and mortgage payments for a home that meets your needs.

You buy a share of the property and pay rent to a landlord on the rest.

When you buy a home through shared ownership, you:

• buy a share between 10% and 75% of the home’s full market value;
• pay rent to the landlord for the share they own;
• usually pay monthly ground rent and service charges, for example towards the maintenance of communal areas.

Buying your share

The share you can buy is usually between 25% and 75%. You can buy a 10% share on some homes. 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.

You can buy more shares in your home in the future. This is known as ‘staircasing’. If you buy more shares, you’ll pay less rent. The amount of rent you pay will be based on the landlord’s share.

Homes you can buy through shared ownership

You can buy:

• A new-build home
• An existing home through a shared ownership resale scheme
• A home that meets your specific needs, if you have a long-term disability – for example, a ground floor flat

Shared ownership homes are offered by housing associations, local councils, and other organisations. They are called ‘providers’ or the landlord.

All shared ownership homes (houses and flats) are leasehold properties.

Selling your home

You can sell your shared ownership home at any time.

If you own 100% of your home, you can usually sell it on the open market, for example, through an estate agent.

If you do not own 100% of your home, you must tell your landlord when you want to sell your home. This gives the landlord the opportunity to find a buyer for your share.

You cannot sell your home on the open market if it has a ‘designated protected area – mandatory buyback’ lease. In this situation, the landlord will either buy the home or arrange for someone else to buy it. Check the ‘key information document’ for the home if you’re not sure what type of lease it has.

What happens when you tell the landlord you want to sell

When you give the landlord notice that you want to sell your home, the landlord has a ‘nomination period’. This means the landlord has a period of time (4, 8 or 12 weeks, depending on the lease) to find a buyer.

The landlord may offer to buy back your share, but only in exceptional circumstances and if they have the funds.

If the landlord does not find a buyer within the nomination period, you can sell your share yourself on the open market.

If the landlord finds a buyer during the nomination period, the sale price will be no more than the current market value of your share. It will be based on a valuation by a surveyor who is registered with the Royal Institution of Chartered Surveyors (RICS).

The landlord’s nomination period does not apply in some circumstances. This includes:

• if you or someone else on the lease dies;
• if the court has asked you to transfer your ownership.

Contact your legal adviser if you’re not sure.

Getting a valuation

You must get a valuation by a surveyor who is registered with the Royal Institution of Chartered Surveyors (RICS). The sale price of your home will be based on this valuation.

Our surveyor will need to visit the property in order to provide the valuation, and they will provide a written report which can be passed onto the relevant shared ownership scheme provider.

Once issued, the report is valid for 3 months.