Shared-ownership is becoming an increasingly popular way of first-time buyers getting their first step on the property ladder, especially in areas like Devon where property prices are particularly high compared to salary levels.
Shared ownership properties are made available by registered social landlords who allow buyers to purchase a percentage of the freehold, or leasehold if the property is a flat, and the buyers pay a rent to the landlords for the remaining percentage. Most buyers will need a mortgage for the portion they are acquiring so will then be paying monthly mortgage repayments as well as rent. This can be expensive but may still be preferable to paying rent to a private landlord and the owner will benefit from increases in the capital value of their property in relation to their share.
Buyers are given an option of increasing their percentage share over time. This is known as “staircasing” and in most cases, there is an option to staircase to 100% so that the buyer then owns the property in full and will no longer need to pay rent.
When a shared ownership property is sold, the landlord will need to approve and consent to the sale as they own a percentage. Further, they will need to agree what their share is worth at that time. Sometimes new buyers will just take on the shared ownership from the seller but in a lot of cases, a buyer will buy at full market value and the matter will be “staircased” on completion, giving the buyer full control of the property.
There are a number of developments in the area where a shared ownership option is available and Beers deal with these on a daily basis. If you would like further information or a quotation for the conveyancing work, please contact Helen Tuck on 01752 246005 or mailto:email@example.com