Shared Ownership is a scheme designed to help people get onto the property ladder. It allows you to buy a share of a property, typically between 25% and 75%, and pay rent on the remaining share. Over time, you can purchase additional shares (known as “staircasing”) until you own the property outright. Selling a Shared Ownership property involves specific rules and processes.
When Can You Sell Your Shared Ownership Property?
You can sell your Shared Ownership property at any time, but the process involves several steps and considerations:
- Eligibility and Restrictions:
- Minimum Ownership Period: Some Shared Ownership schemes require you to have owned the property for a minimum period (often between 1 to 5 years) before you can sell your share. Check your lease agreement for specific details.
- Staircasing Requirements: If you own less than 100% of the property, you may be required to offer your share to the housing association or to other prospective buyers through their marketing channels before selling on the open market.
- Valuation:
- Before selling, you must get the property valued by a Royal Institution of Chartered Surveyors (RICS) accredited surveyor. This valuation will determine the current market value of your share and the property as a whole.
- Notifying the Housing Association:
- You need to inform the housing association of your intention to sell. They usually have the right to find a buyer for your share within a specified period (typically 8-12 weeks). If they are unable to find a buyer, you may then be able to sell your share on the open market.
- Marketing the Property:
- If the housing association does not find a buyer, you can list the property with an estate agent. The sale price should be based on the valuation provided by the RICS surveyor.
- Staircasing During the Sale:
- If you plan to sell your property and you can afford to, you may choose to staircase to 100% ownership before selling. This can make the property more attractive to potential buyers, as they will not need to deal with Shared Ownership rules.
Steps to Selling Your Shared Ownership Property
1. Check Your Lease Agreement
Your lease will outline specific conditions related to selling your Shared Ownership property. Key points to review include:
- Minimum ownership period.
- The housing association’s pre-emption rights (their right to buy back your share).
- Staircasing restrictions, if any.
2. Obtain a Market Valuation
Hire a RICS-accredited surveyor to conduct a market valuation. This ensures that the price reflects current market conditions and adheres to the rules of the Shared Ownership scheme. The surveyor will provide a written report with the valuation, typically valid for three months.
3. Notify the Housing Association
Inform the housing association of your intention to sell and provide them with the valuation report. They will initiate their marketing process and may have a specified period to find a buyer. During this period, they may advertise your share to eligible buyers on their waiting list or through their marketing channels.
4. Marketing the Property (If Needed)
If the housing association is unable to find a buyer within their specified period, you can then market the property through an estate agent. Provide the estate agent with the valuation report and ensure the asking price aligns with this valuation. The agent will help you list the property, arrange viewings, and handle negotiations with potential buyers.
5. Offer Acceptance and Legal Processes
Once an offer is accepted, the legal process of selling your Shared Ownership property begins. This involves:
- Drafting a contract for the sale.
- Ensuring the buyer is eligible for the Shared Ownership scheme (if they are purchasing a share and not the full property).
- Coordinating with solicitors to handle the transfer of ownership.
Costs Involved in Selling a Shared Ownership Property
Selling a Shared Ownership property incurs several costs, including:
- Valuation Fee: The cost of obtaining a market valuation from a RICS surveyor.
- Estate Agent Fees: If you market the property through an estate agent, their fees will apply.
- Legal Fees: Both you and the buyer will need solicitors to handle the legal aspects of the sale.
- Housing Association Fees: There may be administrative fees charged by the housing association for processing the sale.
Considerations and Tips
Staircasing Before Selling
- Consider staircasing to 100% ownership before selling. This can simplify the process and potentially increase the property’s attractiveness to buyers.
Lease Extensions
- If your lease has less than 80 years remaining, it might be worth extending it before selling. Properties with longer leases are generally more attractive to buyers and can fetch a higher price.
Timing
- Be aware of the housing market conditions. Selling in a strong market can lead to a quicker sale and potentially higher price.
Buyer Eligibility
- Ensure potential buyers meet the eligibility criteria for Shared Ownership. This typically includes income limits and other conditions set by the housing association.
Summary
Selling a Shared Ownership property involves several steps and considerations. Key steps include checking your lease agreement, obtaining a market valuation, notifying the housing association, marketing the property if necessary, and handling the legal processes. Costs include valuation fees, estate agent fees, legal fees, and potential administrative fees from the housing association.
Understanding these steps and planning accordingly can help ensure a smooth and successful sale. Always consult with your housing association and seek professional advice from solicitors and estate agents experienced in Shared Ownership properties to navigate the process effectively.
