Thursday, February 13, 2025
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Shared Ownership – The Resale Process!

Charlotte Simpson, Trainee Solicitor in Owen Paulo’s resales department, explains the way it works

When you buy a home through a shared ownership scheme, you are purchasing a share in the property’s full market value and pay rent to a landlord who owns the remaining share.

The landlord can be a housing association, local council or other organisation. Alongside rent, you are typically paying ground rent and service charges to the landlord too. A resale property is where a shared ownership lease has already been granted and the current leaseholder is looking to sell their share. Essentially, every shared ownership property becomes a resale after the first owner sells.

WHY BUY SHARED OWNERSHIP RESALES?

Resales come in all shapes and sizes due to the various schemes over the years. This means that you can buy relatively new properties without the delay for them to be built (not even a year old in some cases) or much older character properties in established communities. The types of properties available are endless – from flats to houses to maisonettes to coach houses and many more!

Not everyone wants to purchase new build, and the resales shared ownership market offers a much broader variety of homes suitable for all homeowners and makes owning your dream home more affordable. This means, over time, you can gradually purchase additional shares in the property, eventually meaning you can own it outright. Or should you want to sell, there is a bustling market of potential buyers which can include other first time buyers or even veteran property owners who want to buy a 100% share in the property.

WHAT IS THE PROCESS?

You will be required to apply (usually through the housing association) and complete an eligibility check before you can be approved to purchase the property. A memorandum of sale will be produced with all the details of the transaction. The process for purchasing a shared ownership home is quite similar to ordinary conveyancing. Your conveyancer will still need to obtain searches, raise enquiries and perform the usual checks. However, they will also need to ask questions specifically related to the housing association’s involvement; requesting a management pack, obtaining the landlord’s approval of your mortgage offer (if you are using one!) and checking for any other requirements of the landlord for the property. Each property is unique, so the number and type of enquiries will differ. However, the process generally takes between 12-14 weeks from the date the draft contract pack is received, provided there are no unexpected issues. You can also purchase an additional share at this time, if you want to own a larger percentage of the property than the seller.

While this can delay the process slightly, as there will be additional work, it does make rent cheaper and means you are a step closer to owning 100% of the property! As a first time buyer, you can use your Lifetime ISA or Help to Buy ISA towards the property price and can also qualify for First Time Buyers’ Relief. This means that you will pay 0% Stamp Duty on the first £425,000 provided that you intend for the property to be your main residence, and the market value is £625,000 or less. Any staircasing is also exempt from Stamp Duty until you exceed an 80% total share! Owen Paulo specifically specialises in resales and staircasing and is happy to advise on the above.

Please send us an email to enquiries@owenpaulo.co.uk or call us on 0808 196 7020 to obtain a quote, or advice. You can also follow us on TikTok on @owenpaulolegal where you can find further information and advice on the conveyancing process and answers to common questions.

owenpaulo.co.uk

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First Time Buyer is an exciting bi-monthly glossy which takes a stylish and comprehensive look at all the options available, setting them out in an entertaining and informative way, and helping potential customers navigate their way through what is often a daunting and complex process. We dispel the myths, reinforce the facts and arm the reader with the tools necessary to make their homeownership dreams a reality.

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