Buying a shared-ownership home in Plymouth?

Conveyancing Solicitors in Plymouth are often asked to act for buyers of 'shared-ownership' homes, and are asked for advice on how this scheme works. Buyers will pay for a share in a home, which can be as low as 30% of its market value. Properties are  offered by housing associations, and shared-ownership offers a excellent way for new buyers to get a start on the housing ladder.

For example Sovereign Living is currently offering apartments for sale at Mount Wise, 52 Charles Darwin Rd, Plymouth, Devon. Sovereign is a not-for-profit organisation regulated by the Homes and Communities Agency. As one of the south’s leading affordable home ownership providers it has already helped to find new homes for over 3, 000 people.

Apartments at Mount Wise are on offer starting from £100, 000. However qualifying buyers can start by purchasing a 40% share for just £40, 000. And buyers do not have to find the whole of that amount themselves, as mortgage finance can be obtained.  

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When acting for a buyer who requires a mortgage, Conveyancing Solicitors in Plymouth will have to make sure that the shared-ownership arrangements meet the lenders requirements, although that is not normally a problem.

Buying a share in a house but occupying the whole of it

It would not be much good buying a 40% share if you could only live in 40% of the apartment, so buyers are granted a lease of the property. This gives them the right to occupy the whole of the house or apartment, but contains provisions for a rent to be paid based on the value of the share retained by the housing association.

When the property is a flat, the lease will also contain the same sort of provisions as apply to flats generally, including payment of a service charge to cover building maintenance and insurance.

Staircasing – the right to buy further shares 

Buyers can elect to buy further shares, normally in 10% increments, up to the total value. The amount which has to be paid for such additional shares will be calculated by reference to the open market value of the property at the time. The procedure is known as 'staircasing' and if a house is staircased to 100% the freehold title will be transferred to the buyer and no further rent will be payable.  

It is not possible to go into detail of all the scheme in this short article. In particular there are complicated provisions for the  payment of stamp duty on such properties so individual advice from Conveyancing Solicitors in Plymouth is essential on each case.  

Selling a shared-ownership home

Owners who have not staircased can still sell their homes, and Plymouth Conveyancers often deal with such sales. Owners will have to give the housing association which owns the remaining share the right to nominate a buyer before being allowed to sell on the open market.  

The buyer may acquire the same share as the seller already owns. Arrangements can also be made to sell at full market price with staircasing taking place on completion so that the buyer acquires 100% of the property.

Anyone buying a shared ownership property in Plymouth, whether direct from a housing association or from an existing owner, should obtain advice from Conveyancing Solicitors in Plymouth.