Selling Shared Ownership: A Step by Step Guide
Whether you’re selling for the first time or moving on to your next home, we will guide you through every step. We know that selling a shared ownership property can be more complicated than a regular sale, with extra rules and procedures to follow. That’s why we offer clear advice and support to help you deal with these challenges easily. From understanding your lease to getting your property ready for the market and meeting all legal requirements, we’re here to ensure your sale goes smoothly and successfully.
What is Shared Ownership Property
Shared ownership property is a government backed scheme that allows individuals who can’t afford to buy a property outright to buy a share of a house or flat and pay rent on the remaining portion. It’s a more affordable way to get into the property market.
You can buy between 10% and 75% of the property, depending on what you can afford to pay rent on. Over time you can increase your ownership share through a process called staircasing and move towards full ownership.
Most shared ownership house leases allow you to staircase up to 100% meaning you can own the property outright. But not all leases do so, so check your agreement.
First Time Buyers
The shared ownership is designed to help first-time buyers get a foot on the property ladder, a more affordable route to homeownership for those with limited funds.
If you don’t staircase to full ownership the housing association or local authority has the right of first refusal, meaning they can buy or sell the remaining share of the property before offering it to an eligible buyer or other.
Selling Your Shared Ownership Property
Before you sell your shared ownership property review your lease. This will outline the process and requirements for selling including any obligations to the other housing provider, association or local authority.
Read the rules of shared ownership as selling a shared ownership property is different to selling a property outright. There may be restrictions or extra procedures when selling shared ownership properties.
Get Professional Advice
Talk to a mortgage broker or financial advisor to understand your options. They’ll help you with the financial side of selling a shared ownership property and guide you through the process.
Check Your Energy Performance Certificate (EPC)
Make sure your property has a valid Energy Performance Certificate (EPC) that’s less than 10 years old. This is a legal requirement when selling a property and gives potential buyers information about the property’s energy efficiency.
Your Lease
When you’re selling your shared ownership property the first thing to do is to read your lease. This will outline all the specific terms and conditions for selling your share of the property. One thing to check is if there are any restrictions on selling shared ownership, such as a nomination period. During this time the housing association or local authority can find a buyer before you can market the property yourself.
Also understand the staircasing process—the option to buy more shares of the property over time. If you’ve staircased to 100% you may be able to sell the property outright, but if you still own a percentage you’ll have to sell and at what price will be affected.
Valuing Your Property
When you sell your shared ownership property getting a valuation report is a key part of the process to determine its current value. You’ll need to get a RICS (Royal Institute of Chartered Surveyors) qualified surveyor as their valuation will be the official figure used to set the sale price of your home. This will ensure the property is valued in accordance with industry standards, protecting you and potential buyers from price discrepancies.
The valuation report is needed not just to set the sale price but also to satisfy the housing association or local authority involved in the shared ownership. Remember this valuation is only valid for a few months so time it right with your sale process.
Also, there are costs involved in getting a RICS qualified surveyor which can vary depending on your location and property size. Make sure to factor this into your overall sale costs so you don’t get any financial surprises.
Estate Agent’s Role
Selling your shared ownership property through an estate agent is an option but remember this comes with fees. Fees will vary depending on the agent and the services they offer so shop around and get quotes before you decide.
When you use an estate agent they will find a buyer who meets the affordable homes criteria as shared ownership properties are reserved for those who qualify under the scheme. They will market your property and deal with enquiries so it’s easier for you especially if you’ve never sold a property before.
The sale price will be based on the market value at the time of sale as assessed by the agent and a RICS surveyor. This will ensure you and the buyer get a fair deal that reflects the current market. Remember the agent’s fees will come out of the final sale price so factor this into your overall financial plan.
Resale Process
The resale process for a shared ownership property starts by informing your housing association of your intention to sell. This is key as the association has a say in the sale of other properties and may have rules and restrictions. Once you’ve informed them you’ll need to get a valuation report from a RICS qualified surveyor to determine the value of your share in the property.
The housing association has the right to find a buyer themselves, such as a first time buyer who qualifies for shared ownership. If they do this you may need to transfer the lease to their chosen buyer. But if they can’t find a buyer within a certain timeframe you may be able to put the property on the open market.
Remember the sale price of your share can’t exceed the current market value so it’s fair for you and the buyer. This price will be full market value and based on the valuation report and you may need to work with your housing association throughout the process to ensure a smooth and compliant sale.
Buyer’s Eligibility Checked
Before you can sell your shared ownership property the buyer’s eligibility will need to be checked. The housing association will check the household income of the potential buyer to see if they meet the criteria for the shared ownership scheme.
The buyer will need to be one of the following: a first time shared ownership buyer, someone who has never owned a shared ownership property or a current shared ownership homeowner looking to staircase and increase their ownership percentage.
Once the buyer’s eligibility has been confirmed the housing association will approve the sale and the property will remain within the scheme parameters.
Exchange and Completion
Once the buyer’s eligibility has been confirmed the full exchange and completion process can begin. At this stage both parties will agree on the exchange date, when contracts are signed and the completion date which is the final transfer of ownership.
On the completion day you will meet with the buyer to finalise all remaining matters, hand over the keys and ensure the sale is legally complete. This is the final stage and closes the sale and transfers ownership of your shared ownership property.
Marketing and Selling Your Property
When it comes to marketing and selling your property the housing association or local authority will usually take the lead on marketing fees for your shared ownership home. They have the experience and established networks to attract buyers.
To help with the marketing process you may be required to provide high quality photos of your property showing its best features. You’ll also need to complete a full information pack which will include details about the property such as size, layout and any unique features.
Common Issues and Solutions
When selling a shared ownership property be aware of the common issues that can arise during the process. Delays are common so be patient and expect waiting times. These can be due to the housing association’s timelines or the buyer’s financing process.
If you’re not happy with the valuation report you can request another one. But be aware this will cost extra so think carefully before you do. Make sure the valuation reflects the current market value of your property.
If the buyer pulls out it can be a pain. But you have options. You can find another buyer who meets the eligibility criteria or sell on the open market. This flexibility allows you to adapt to changing circumstances and increases your chances of selling your shared ownership property.
Selling on the Open Market
If you own 100% of your shared ownership property you can sell on the open market. This route gives you more flexibility and the opportunity to reach a wider audience of buyers. To start the process you will need to follow the usual steps of selling a property, starting with a valuation report. This will help you determine the market value of your home.
Once you have a valuation you can market the property. This may involve using an estate agent to showcase your home and attract buyers. Selling on the open market will incur extra costs such as estate agent fees and legal fees.
Selling a shared ownership property is more complicated than a normal property sale but with the right guidance and preparation you can get through it. Understand the shared ownership scheme and the rules that apply to the sale of your property. Be proactive and informed and you’ll make the process smoother and get a good result selling your shared ownership property.
Useful Data and Resources for Shared Ownership Sellers:
Statistic | Source |
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Percentage of first-time buyers using shared ownership schemes | UK Government – Shared Ownership Programme |
Comparison of shared ownership vs. full ownership affordability | National Housing Federation – Shared Ownership |
Average time taken to staircase to full ownership | Money Helper – Staircasing Guide |
Eligibility criteria for shared ownership schemes | Homes England – Shared Ownership Scheme |
Percentage of homes in the UK with EPC ratings below C | UK Government – Energy Performance Certificates |
Average estate agent fees for selling shared ownership properties | Which? – Estate Agent Fees Explained |
Average delays and fall-through rates for property sales | Zoopla – Shared Ownership Guide |
Legal requirements for selling shared ownership properties | Citizens Advice – Shared Ownership Information |