The Shared Ownership scheme is a great way to buy a house that you may not be able to fully afford right now.

Shared ownership schemes are a great alternative to purchasing a property outright. It allows buyers who meet the eligibility criteria to secure a mortgage to buy a stake in a property, usually between 25% and 75%, while paying rent on the remaining share to the housing association or private developer that own the building. The rent you pay on the remaining share is charged at a discounted rate.

We have Property Lawyers that specifically specialise in shared ownership purchases and are trained to deal with the complexities it requires. They will always keep you up to date, explain anything you do not understand and we've even negotiated on the fees for you to ensure you get the best price!

Eligibility to purchase through the Shared Ownership Scheme

A potential buyer is able to use this scheme if:

• The household earns £60,000 a year or less
• A first-time buyer (or you used to own a home, but can’t afford to buy one now)
• Or rents a council or housing association property

Purchasing more Shares

This is known as Staircasing. Further shares can be purchased at any time after becoming the homeowner. The cost of the shares depends on the market value at the given time however potential buyers must be aware that should the house prices increase that the additional share may be more than the first share. An advantage of purchasing more shares, is that the rent payable to the Housing Association decreases as they will own a smaller share of the property. Please however bear in mind that some Housing Associations do not allow staircasing to 100% when looking for a property.

Stamp Duty

Please note that Stamp Duty is considerably more complex under the Shared Ownership Scheme. Please bear in mind when looking for a property under this scheme Shared Ownership properties are not within the criteria of the First Time Buyer Exemption.

There are two options available for paying SDLT under the scheme: -

1. Market Value Election – this is making a one-off payment based on the open market value of the property at the time of the purchase. This option allows a potential buyer to rely on the First Time Buyer exemption if the full market value is below £300,000.00. After making a Market Value Election on a purchase, no Stamp Duty is payable on any staircasing transactions.
2. Paying Stamp Duty in stages –Stamp Duty is payable on the premium paid for the initial share. The advantage is that on the first initial transaction, stamp duty may be considerably lower or none is payable. However please bear in mind if the share falls above the £125,000.00 threshold, Stamp Duty will be payable. Please also note that your specified rental payment (the annual rental payment to the Housing Association on that part of the property that you have not purchased) is also taken into account when calculating the Stamp Duty payable.

If you wish to Staircase at a later date, Stamp Duty is not payable until the property has been staircased to 80%. Once the Share is up to or over 80% Stamp Duty is payable on the transaction premium and also on any subsequent transactions. This is known as ‘Linked Transactions’.

If you purchase additional shares in the property and elect to pay SDLT in stages then you will not have to pay any more SDLT or notify HMRC in an SDLT return until your share ownership reaches 80% or more regardless of whether any SDLT was paid on the initial purchase. However, once your share goes up to, or over, 80% SDLT will be payable on the transaction that took you to or above 80% and also on any subsequent transactions. The percentage rate of SDLT applied to these payments is based on the total amount paid for the property so far, including the initial purchase. This is because the initial purchase and subsequent staircasings are treated as “linked transactions”.

Selling a Shared Ownership Property

Before selling a Shared Ownership Property, consent must be obtained from the Housing Association for the resale. The Housing Association has the right to buy the property back first. This is known as ‘First Refusal’ and is applicable for 21 years after you staircase the property to 100%.

You can rest assured that our recommended Property Lawyers will deliver a personal service and you can be confident that there will always be someone to answer the phone if you have any questions or need assistance with your move.

We understand the importance of being kept up to date with the purchase of your home and also that we all live busy lives. So you can now track your progress from your phone or online using the Property Lawyers online tracking app.

When you use one of our recommended Property Lawyers you will also be fully protected with our 3 Part Protection scheme that is included in your quote! You'll get a certificate for a No Sale, No Legal Fee, Lifetime File Transfer and a Search Fee Guarantee to give you confidence in your move.

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