by Tony Lilleystone, Legal Manager
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One increasingly popular way in which first-time buyers in London may be able to get a step on the property ladder is shared ownership, which requires additional House Conveyancing above and beyond a standard transaction. With the generally high level of prices in the capital, this is one way in which buyers can acquire a stake in a home without having to finance the full price.
There are various shared ownership schemes on offer, but most allow a purchaser to start off by buying a share, say 30%, in a property. The remaining share will usually be owned by a housing association and rent will be paid to them.
As an example, a one bedroom studio flat is currently on offer at Hurlington Court, Roehampton, London, SW15 5EY, The full price would be £210,000, but buyers can 'part buy part rent' a minimum 25% share for £52,500, paying a monthly rent of £361 plus service charges. Taking monthly mortgage payments into account, the total monthly outlay is still likely to be less than the rent would be on such a flat.
Buyers have the right to purchase additional shares up to the total value of the property (a process known as 'staircasing'.) The amount payable for further shares will be based on the open market value of the whole property at the time.
The rent will be reduced in proportion to any additional share purcahsed.
If a house is staircased to its full value then the housing association will transfer the full freehold title to the owner, while for flats the property will remain leasehold but no rent will then be payable. The House Conveyancing lawyer assigned to
For further information about shared ownership in London see http://www.shared-ownership.org.uk/
Owners can market their homes, but it is usually necessary to obtain the approval of the housing association to any buyer. The property can be marketed on the basis that the existing share is sold, in which case the price will reflect the value of the share.
Shared ownership homes may also be marketed for their full market value, on the basis that the seller will arrange to staircase to 100% on completion. This requires the housing association to make a valuation of the outstanding share, and then the respective House Conveyancing firm must incorporate appropriate provisions in the sale contract and make the necessary arrangements at completion so that the buyer ends up with the full title.
Anyone buying on a shared ownership basis in London, or looking to sell an existing property, will need the advice of a Solicitor with the necessary experience of handling House Conveyancing.
Fridaysmove can assist with both freehold and leasehold House Conveyancing in London - click for a quote or phone 0330 660 0826.
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