LEGAL
How shared ownership resales and staircasing work
Shared ownership resales are becoming an ever-popular option to enable first time buyers to make that all-important first step on the property ladder. Coralie Phelan, Head of Resales and Staircasing at Prince Evans Solicitors LLP, explains the resales process along with the option to staircase in the future
WHAT IS RESALE SHARED OWNERSHIP? The seller has an existing lease and already lives at the property and is moving on. Resale shared ownership being a pre-loved property with the seller already in occupation. The property could be fairly modern with a very new lease or it could be an older property There is a variety of different properties to choose from You could choose a property with traditional features or a very modern property. HOW DOES SHARED OWNERSHIP RESALE WORK? You can purchase a share of the property, usually between 10% and 75%, subject to meeting the eligibility criteria. The eligibility requirements are as follows: You must have a combined annual household income of under £80,000, or £90,000 in London You must not own or part- own another property on completion You cannot afford all of the deposit and mortgage payments for a home that meets your needs on the open market. WHAT ARE THE KEY POINTS OF RESALE SHARED OWNERSHIP?
shared services or estate maintenance You will not be able to rent out or sublet until you own 100% of the home Your lease will outline your repair and maintenance responsibilities The lease will provide for annual upwards-only rent increases.
responsibly and ensure they only allow you to purchase the property if you can afford to keep up with the repayments on your mortgage and the rent you pay them and other associated outgoings. This is due to the scheme being Government-backed with the associated reassurances that there are certain rules that your landlord must abide by
Staircasing is the process of buying additional shares in the property you own with a corresponding reduction in specified rent. You are basically purchasing more equity. There a number of advantages to staircasing as follows: Most leases allow you to purchase 100% of your home You may benefit from more mortgage choices as you are not limited to shared ownership products It may be easier to sell the larger the percentage owned You have increased security with more equity You pay less rent The greater the percentage owned, the more you benefit from property price uplift. It’s important to instruct an expert in shared ownership resale and staircasing to advise you appropriately. The resales and staircasing team at Prince Evans would be happy to provide a quote, please call 020 8799 1860 or email rst@prince-evans.co.uk
WHAT ARE THE ADVANTAGES OF RESALE?
Ideal first step on the property ladder.
There are several advantages including the fact that resale properties are often more affordable than new build and you will be moving to an established neighbourhood. WHAT ARE THE OTHER ADVANTAGES? Low deposit – could be 5% rather than the traditional 10% of the purchase price Your landlord will be under an obligation to act
You can then decide whether resale shared ownership is right for you. If so, you should consider instructing a firm such as Prince Evans LLP which specialises in shared ownership resales and staircasing.
WHAT IS STAIRCASING?
You pay rent to the
Once you have owned your property for a certain period of time (as specified in your lease) you can consider purchasing additional shares or staircasing.
housing association on the percentage you do not own
You will have to pay a service charge for any
134 First Time Buyer June/July 2024
Made with FlippingBook. PDF to flipbook with ease