Shared Ownership

Shared ownership was introduced by the government to help people who can’t afford to buy a home outright. Shared ownership lets you buy a share of a property (initial shares are available from 25% to 75%) and you pay a rent on the remaining share that you do not own. If you wish, over time you can buy more shares. This is called ‘staircasing’, so that eventually you own your home in full*. This may be limited if the property is in a rural area or a leasehold scheme for older persons. Please check the individual scheme for details.

The scheme allows you to buy a share of a property. The share you buy is usually funded by a mortgage which you will need to arrange with a bank or building society. The remaining share, namely the part you do not own, will be rented to you by LHP.

The scheme is aimed at people who can’t afford to buy a suitable home in any other way. You must be in housing need and be unable to afford to buy a property in full on any scheme. Whatever your circumstances, the total joint income of all applicants must be less than £80,000 per year. Some developments or properties may be subject to specific allocation criteria and you should check with us directly.

Your application may be refused if you are subject to immigration control and we reserve the right not to register or defer registration if you or a member of your household is guilty of unacceptable behaviour.

If you decide to buy a house or flat using the shared ownership scheme we will usually give you a lease for 99 or 125 years. This will give you the right to live in your home as an owner occupier. It will also allow you to buy more shares of your property later on if you would like to and you can afford to do so. The lease also gives you the right to sell your property.

The lease will set out the responsibilities you have for repairing the property and paying your rent and any service charges.

Even though you have not completely bought the property, you will still have the normal rights and responsibilities of a full homeowner occupier.

Ask your legal advisor for help and guidance about the terms and conditions of the lease.

Buying a shared ownership property doesn’t mean you have to share with strangers. You can however have up to four joint owners of a property if your mortgage lender will allow it. All the people interested in owning the home must be eligible as individuals and together.
Leasehold or Freehold?

All homes purchased through Shared Ownership are leasehold, which means that you own the property, but the land upon which the property is built is owned by the freeholder. This gives you the right to occupy the property for as long as the lease is valid. Freehold, on the other hand, means that you own the property and the land upon which the property stands. In most cases, once you’ve purchased outright (a 100% share) we can make it a freehold for you.

All of our available properties are advertised on our property search page.

The housing needs of each applicant are taking into consideration such as the number of people in the household, their age and gender and other family circumstances. We will make sure that properties are not overcrowded or under-occupied and therefore, meet local housing need. You will generally be allowed one bedroom more than your household requires.

Eligibility varies depending on the development you are applying for, the property size and whether there is any criteria set by the local authority. We also consider the criteria set by local Help to Buy agents if the property has been built with the assistance of grant monies.
Our criteria meet the guidelines set by our regulator and government policy. To be eligible for a shared ownership property you must be in housing need.

You must also:
have a household income of less than £80,000 and not be able to purchase a property suitable to meet your needs on the open market.
Priority will be given to:
MOD approved personnel and those given priority by the local authority
public sector or registered provider tenants
first-time buyers
HOLD scheme applicants

Owner occupiers can, in exceptional cases, apply for the scheme subject to the following conditions:
that the general eligibility requirements for the scheme are met
that the annual household income is no more than £80,000 and you are otherwise unable to purchase a property that is suitable for your needs
an application is made to the local Help to Buy agent
you have support from the local authority that you are in housing need
you have a sale on your property which can be evidenced or is progressing

Bungalows and age restricted properties
Occasionally, we will have bungalows or apartments for sale which have specific sale requirements. After any specific scheme requirements are set, we follow these guidelines:
Bungalows will initially only be available for people aged 55 and over with additional priority also being given to people of that age specifically requiring a bungalow due to health reasons.
If the scheme is not age specific the criteria may be opened up to people under the age of 55 with specific need for this accommodation.
All properties which are for wheelchair users will be marketed as such and allocated to people with a specific need for that accommodation.

The prices vary depending upon the size and type of property and are determined by a qualified chartered surveyor.

Affordability

You must be able to afford the share you buy and be able to pay any monthly rent and service charges. Affordability is assessed using an affordability calculator. You must also supply evidence of a mortgage in principle, letter from a financial advisor, mortgage offer or other evidence. If you are buying with cash you will need to providence that you have or will have the cash available and evidence of where of the cash has come from.

The size of the share you buy will depend upon your income, your savings and the type of scheme under consideration which may have specific requirements to meet. Normally, people buy a 50% share, but you can buy a smaller or larger share if you want to. Initially you can buy as little as 25% or as much as 75%. You will be encouraged to buy what you can afford.
You can also buy more shares in the future if you want to, as and when you can afford to do so, until you own the whole property. This is called ‘staircasing’. You will pay less rent if you buy a larger share. Some schemes do not allow you to buy 100% such as properties in some rural areas and schemes which are specifically designed for the elderly. Please check with us whether this applies to the property you are interested in buying.

What are the initial costs of buying a shared ownership property?

You will need to have savings available to pay for:
- Deposit
- Mortgage application fee
- Valuation fee
- Legal fees
- Non-refundable reservation fee (currently £250), if you proceed to purchase, this amount is deducted from the monies we receive for your share of the property
- Removals
- Carpets
- Household furniture
- Phone line connection
- Aerial connection.

This is not an exhaustive list.

Mortgage repayments
You may need to borrow all or part of the cost of your share from a building society or bank. Your repayments may vary as interest rates change.

Rent

The rent you pay is calculated based upon the share which you have not bought. For instance, if you purchase a 25% share of a property worth £125,000 you will pay £31,250 for your share. The rent will be calculated on the £93,750 which is still owned by LHP. At the time of printing, our shared ownership rent is calculated at 2.75%. The price payable would be £93,750 x 2.75% / 12 = £214.84 per month. Remember you will need to pay this in addition to your mortgage repayments.

Your rent will be reviewed annually in line with the terms set out in your lease.Council Tax
You will have to pay Council Tax to the local authority. Each property will be placed in a Council Tax band.

Heating and lighting bills/ water and sewage charges

You are responsible for paying your own bills. When you buy your property it is your responsibility to contact the service providers directly to provide your details, accurate meter readings and organise payment arrangements. If your property is a flat and there are communal services, we will recharge these to you as part of your service charges.

Insurance

We will arrange your buildings insurance cover; the cost of which is then recharged as part of your monthly service charge fee.

You are responsible for arranging and paying for your contents insurance.
If your property is a house and you go on to purchase 100% of the property, you will become responsible for arranging both your own building and contents insurance from the date of sale.

Service charges

Flats

For some properties you will also need to pay a service charge on top of your rent. The service charge relates to the cost of providing and maintaining services and facilities within your building such as communal lighting, communal heating and hot water, door entry systems, alarm systems, lift maintenance, cleaning services, insurance and administration charges.

The services you pay for depend on the location and type of property. Service charges are split fairly between all properties within a block.

If major repairs or improvements are required to your building, we will consult with you regarding these before the works are carried out as you will be responsible for paying a contribution towards the cost.

Houses

You will pay a service charge for your buildings insurance and administration charge. Other service charges may also apply depending on the development, so please check with us.
Estate management fee

Some properties are subject to an estate management fee which is an annual charge for the upkeep and maintenance of the development where your property is located. The fee varies depending on the development and will be either payable directly to the estate management company or we will collect the fee along with any service charge. We will advise you of the specific development details and costs.

The service charge period is based on our financial year which runs from 1 April to 31 March. Before you buy your property we will advise you what the current charges are.

In March every year, we will advise you what your annual charge will be. At this point you can set up a payment plan or pay the amount in full. You will receive monthly invoices throughout the year detailing what you need to pay. Charges are reconciled against actual costs and any under or over payment is included in the next year’s annual charges.

Your rent is payable monthly in advance. You will pay your first month in advance to your solicitor. Once you have completed your purchase we will write to you directly to make payment arrangements. You can pay your monthly rent by Direct Debit, online, over the phone or at any PayPoint or Post Office with your payment card. You must keep your rent one month in advance.

Within 28 days of receiving your service charge invoice you should contact us to confirm how you are going to pay. One-off payments can be made or you can spread the cost over the course of the year. Direct Debit is the easiest way to pay.

You must pay your rent and service charges as part of your lease agreement with us. If you have any financial problems which may mean you are having difficulty paying your rent, please contact us so that we can advise you accordingly.

This is known as sub-letting and it is not allowed under the terms of your lease.

The mortgage contract is between you and your building society or bank. If you begin to have financial problems which may mean you cannot pay your mortgage, you should let them know as soon as possible. If you do fall behind on your payments and cannot agree on a solution with your building society or bank, there is a risk that they will take possession of your home and sell it. You may be entitled to your share of the money received after all your debts have been cleared.

If your property is a house you are responsible for all repairs and redecoration both inside and out including any servicing of the systems and maintenance of any boundaries.

If your property is a flat, you will be responsible for all repairs and redecoration inside your home.

We will keep the building (in which your flat is situated) in good repair and make sure that all shared communal areas such as the stairs and corridors are decorated, clean and lit. You will have to pay a share of those costs. This is called a ‘service charge’. We will tell you how much service charge is spent and you will be consulted before any major repair or maintenance work is carried out.

You may receive a warranty for your property which will cover any defect issues. We will advise you what warranty period you have. During any warranty period repairs should be reported through our repairs line on 0345 604 1472. We will then inform you of what action will be taken. Please note, if the damage has been caused by you the repair will not be covered by the warranty.
Please note, if the damage has been caused by you the repair will not be covered by the warranty. If your property is covered by the one year warranty (from the date of completion) you should call us to log your repairs. We will then inform you of what action will be taken.

You are responsible for supplying your own furniture and fittings. You are also responsible for insuring the contents of your home.

If you want to make structural alterations to your property, you must discuss this with us and get our written agreement before you carry out any work.

You can sell your home at any time; the first step is to contact us. You can either sell the part that you own, or you can buy the remaining share from us and sell the whole property outright. You will benefit from any increase in the value of the property according to the share you own but you may also be affected if the property falls in value. Unless you own the property outright, clauses in the lease allow us to choose potential buyers and limit the sale price to one determined by an independent valuer. This is because we want the property to remain available and affordable to those people who will benefit most from our shared ownership scheme.

Valuation

The sale price of your property must be determined by an Independent Chartered Surveyor. They will carry out an open market valuation which will include any improvements you have made to the property. Please note there is a charge for this service. We can arrange a valuation on your behalf and recharge you the costs, please contact us to find out the current costs. You are permitted to use your own surveyor however you must make sure that they have a recognised qualification of FRICS or MRICS. You should ask your surveyor to contact us to obtain a copy of the guidelines required to produce the valuation.

The valuation will be valid for three months. If the sale does not take place within this timescale then the valuation will need to be extended. Whoever arranged the original valuation will need to arrange this (please note there may be an additional charge).
If you do not agree with the valuation you will need to provide evidence to support this and provide us with evidence of other properties of a similar type which have sold in your area, including the prices achieved. We will provide this information to the valuer who will consider this before making a final decision.

When the valuation is agreed, we will confirm to you in writing the full market value of your property and the current value of your share. After consideration, if you wish to proceed with a sale of your share you must confirm this to us in writing. Upon receipt of your confirmation we will confirm acceptance to nominate a buyer and advise you of when the eight week nomination period will end.

When you have confirmed that you wish to proceed to sell your share we will:

- Visit your property to prepare marketing information
- Market the property via the local Help to Buy agent for this area
- Market via our website and social media platforms
- Contact all applicants currently on our waiting list.

In addition, we will:

- Allows us, we will charge you 1% plus VAT of what you sold it for as a payment for helping you to find a buyer.
- When a sale has been agreed you will need to instruct a solicitor to act on your behalf. Most solicitors will quote a fixed fee for handling your sale.

Your solicitor will:

- Provide information about your property to the purchaser’s solicitor
- Agree a date for exchange and completion with the purchaser’s solicitor
- Work out who needs to pay any outstanding service charges or whether these will be apportioned between yourself as the seller and your buyer
- Provide any legal advice you require.

We will:

- Answer queries from your or your purchaser’s solicitors, there may be a charge for this.

You will:

- Answer any queries from us which will assist in the sale of your property
- Provide us with your solicitor’s contact details
- Check the progress of your sale with your solicitor
- Respond to queries made by your solicitor promptly
- Advise us of any changes in the charges you have to pay for your property
- Allow access for your purchaser’s surveyor
- Agree a convenient completion date with your purchaser through your solicitor. This should be within three months of the valuation. If this exceeds the three months’ timescale an updated valuation will be required. Please note you may incur a fee for this.
- When a sale has been agreed you will need to instruct a solicitor to act on your behalf. Most solicitors will quote a fixed fee for handling your sale.

Where we are not nominating a buyer

If we are unable to nominate a buyer for your property within the time specified in your lease (usually eight weeks), we will write to you to make you aware that we are out of time. You will then be able to place the property on the market with an estate agent of your choice (and no longer have our nomination fees to pay). Please note you will incur estate agent fees.

When your property is for sale on the open market via an estate agent you can either:

Sell your current share

Your purchaser must be eligible to purchase a shared ownership property and be registered with the local Help to Buy Agent. Your agent should contact us in order to obtain an application form and details of the procedure for their customers. Your agent will also need to check any service charge and rental costs with us

Sell 100% of the property value (as long as there are no restrictions)

This involves you using your purchaser’s money to buy our equity share, before immediately selling 100% of the property. This is known as ‘back to back staircasing and sale’. You should ask your solicitor about the requirement to pay Stamp Duty Land Tax.

You cannot sell for more than the current market value. It is important that you ensure that your estate agent is aware of this. If you do sell 100% of the equity at more than the valuation price, your lease may give us the right to claim any difference between the valuation price and the sale price you receive from your purchaser. This also applies where you have staircased to 100% and are the freehold owner.

Please advise your estate agent that they will need to provide us with a Memorandum of Sale when a sale has been agreed.

Freehold Service Charges

After buying 100% of the property you may still have some freehold service charges to pay, we will advise you of these.

‘For sale’ boards

Please check with us before placing a ‘for sale’ board at your property. For flats, your lease will usually allow a board to be placed in the window but not fixed to any part of the structure or within the grounds.

If you are looking to move to another shared ownership property you should register with the Help to Buy agent for the area in which you are looking to buy. You will also need to complete our application form on our website.

Arrange viewings for your property. However, you will need to carry out the viewings
assess applications received and allocate the property to the applicant in the most need
discuss any questions your purchaser may have regarding the shared ownership scheme
communicate with both seller and purchaser regarding the sale and purchase.

Nominating a buyer

Most of our shared ownership leases give us the right to nominate a buyer so that the property remains available for low-cost home ownership. Where we have nominated a buyer and your lease

Yes - we are happy for you to arrange a mutually convenient appointment for measurements to be taken. Please arrange this directly with the company and select appointments between 9am and 4.00pm, Monday to Friday. Please check with us before making the appointment and afterwards to confirm, so that we can allow access to the property. Alternatively, ask the company to contact us directly.

We only allow carpets and blinds to be fitted once contracts have been exchanged.

‘Exchange’ occurs when our solicitor and your solicitor or legal conveyancer exchange legal contracts and when the sale of the property to you becomes legally binding.

‘Completion’ is when monies are transferred from your solicitor to our solicitor to purchase your share of the property. Once monies are received, the sale paperwork is completed by the solicitors and you become legally responsible for the property.

Once we have received confirmation from our solicitors that completion has taken place, we will telephone you to collect your keys from our office.

If you have to claim on your buildings insurance, please telephone the insurance company directly and provide them with the policy number and details of your claim. The policy number can be found on the policy summary of cover which was sent to you following the purchase of your home and annually thereafter.

When a completion date is set we will arrange for a member of our heating team to meet with you at the property (between 8.30am and 5pm Monday to Friday) to demonstrate how to use your heating system. You will be given a morning or afternoon appointment.