The Shared Ownership Scheme is a great way to get on the property market ladder and with the option of staircasing, it is a good way to gain 100% ownership of your property over time.
What is Shared ownership?
Shared ownership of a property is when the buyer purchases a “share” or “stake” in a property rather than purchasing outright. By sharing an ownership you do not give up occupancy rights and will not have to share your home with anyone, it will simply mean you own part of the home and pay rent for the part of the home you don’t own to the or shared owner(the landlord).
This type of ownership is done on a leasehold basis and therefore some terms agreed between you and the housing association/social landlord may differ.
This scheme was designed to help people who cannot afford to get on the property ladder by any other means.
What is Staircasing?
Staircasing is increasing your ownership of your shared ownership property, ie purchasing more of the property by buying more shares/stakes.
Depending on the type of lease you and the landlord hold and the terms within it you could be able to purchase small amounts of the property over time until you eventually own 100% of the property. Most leases have this clause which allows the tenant to purchase the entire lease in this way.
If you opt for staircasing your rent will also decrease as the more of the property you own the less of the property you are renting.
Am I eligible for shared ownership?
Not everybody will be eligible for the Shared Ownership Scheme, you may be eligible in the following situations:
- If the income in your household is less the £60,000 a year. Or in London less than £71,000 and you are wanting to purchase a share in a 1 or 2 bed property or if you are wanting to purchase a share in a 3 bed property in London the household income should be £85,000 or less.
- If you are a first time buyer or you used to own a home but can no longer afford to buy a property.
- If you are currently renting from a social landlord/housing association .
- If you are aged 55 years old or over, there is another type of shared ownership scheme called “Older People’s Shared Ownership Scheme”. This works the same way as a shared ownership in many ways, however you will only be entitled to purchase 75% of the property, after you have purchased 75% of the property you will no longer have to pay rent on the remaining 25%.
- Long term disabled people may also be able to buy a home that is for sale on a shared ownership basis, this is under “Home Ownership for People with Long-Term Disabilities” (HOLD).
I want to purchase a percentage of a property/I want to be a Shared Owner, what do I do?
As mentioned, the Shared Ownership Scheme is a great way for people to get onto the property ladder. Purchasing a percentage of a property can realistically bring you a step closer to, what seemed like a distant goal, of owning your own property.
If you want to purchase a share of a property then contact us today and we can get you started. Our experienced solicitors will be able to take you through the process and guide you on your future options if you wish to staircase at a later date.
I already own a share of property and want to purchase more shares/I want to staircase, what’s the process?
Firstly you will have to check within your lease if you are eligible for staircasing, most lease have a clause to allow shared owners to purchase more shares, however you will have to ensure your lease entitles you to do this.
Then, after you have worked out the percentage you would like to buy and how you will pay for it, you will need to appoint an experienced shared ownership conveyancing solicitor.
The staircasing process can be very complex and is more complex than buying into a shared ownership. The process involves:
- Contacting the Housing Association/Social Landlord
- (If applicable) Dealing with the mortgage lenders
- Arranging for the property to be valued
- Preparing the documentation required (Memorandum of Staircasing)
If you are purchasing the final percentage, therefore meaning after this staircasing stage you will own the property 100%, the the process is known as final staircasing and the freehold of your home may then be transferred to you (this is set out in the terms of your Shared Ownership Lease).
If you would like to find out more information, gain expert advice or get help finding the right solicitor for you then contact our team today.