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Shared Ownership was introduced to allow people to get onto the property ladder who may not otherwise have been able to afford to buy their own home. Shared Ownership properties can be either houses or flats but, in most cases, are built by specialist Housing Associations.
It allows you to own a portion of the property whilst you rent the remainder, owned by the Housing Association.
The shares in which you and the Housing Association own the property are decided when you make an offer. However, there is always an option for you to buy a bigger share of the property over time, known as staircasing.
In many cases, you can staircase up to 100% of the property so that you become the sole owner and the Housing Association has no further interest in it.
However, in certain areas, local councils place restrictions within the planning permissions granted to Housing Associations which prevents staircasing above a certain level (usually 80%). This is a mechanism to try to ensure that the house will always be available for individuals who may otherwise be unable to afford accessing the property ladder.
We deal with many Housing Associations and have considerable experience in dealing with shared ownership property. If you’re buying a shared ownership property, it’s vital that your lawyer has that experience since there are various aspects of dealing with such property which differ considerably from a “standard” house or flat. For example, there are various provisions which mortgage lenders will insist on seeing in the documentation before they agree to lend money on a shared ownership property.