The transfer of equity is a significant legal and financial transaction that involves changing the
ownership structure of a property.
By understanding the process, legal considerations, and practical tips for navigating a transfer of equity, Price and Kelway can ensure a smooth and legally compliant transition while protecting their interests and rights in the property.
Here’s some generic details in relation to the typical schemes and an overview of the process and how we can help:
- Prospective buyers must meet specific eligibility criteria set by the shared ownership scheme provider, which may include income thresholds, residency requirements, and restrictions on property ownership.
- You would be required to choose a suitable property from those available through the shared ownership scheme, considering factors such as location, size, affordability, and eligibility requirements.
3. Financial Arrangements:
- Once you have located a suitable property, you will need to think about securing financing for your share of the property which will typically be through a combination of a mortgage and a deposit.
- The initial share you would purchase would usually between 25% and 75% of the property’s value, with the option to increase ownership over time through a process called “staircasing” which we touch upon further below.
- The scheme provider will have a standard set of documents which they will use and which they will be unlikely to agree to deviate from. Generally speaking, the shared ownership arrangement is governed by a shared ownership lease meaning that you will effectively own a leasehold unless and until you have fully “staircased” the purchase and own the property outright. We have experience in reviewing and interpreting these types of documents and will report to you on them in clear and concise language encouraging you to raise any issues which you are unclear on with us throughout.
- The shared ownership lease will outlines the rights and responsibilities of the buyer as a shared owner, including details on maintenance responsibilities, service charges, and the process for staircasing or selling the property.
- AOften Shared ownership properties often have restrictions on resale, including the requirement to offer the property back to the scheme provider or give them the right of first refusal before selling on the open market. We will want to discuss this with you fully to ensure that you are comfortable with the implications of the arrangement before you proceed.
5. Completion and Occupation:
- Upon completion of the legal process and transfer of funds, the buyer takes possession of their share of the property and moves into their new home.
- Shared owners will usually pay a monthly housing charge to the scheme provider, which covers costs such as rent (on the portion of the property still owned by the provider) and service charges for maintenance and management of communal areas.
- Shared owners have the option to increase their share of the property over time through staircasing, which involves purchasing additional shares from the scheme provider. When the time comes, we can assist you with the staircasing process and, in time, with the transfer of the freehold to you.
Why use Price and Kelway for your shared ownership purchase?
Our experienced team have decades of experience in dealing with leasehold and shared ownership properties. We recognise that shared ownership offers an accessible pathway to homeownership for individuals or households who may not be able to afford to buy a property outright. By understanding the process, legal considerations, and practical tips for navigating shared ownership, Price and Kelway can help you make informed decisions and successfully embark on the journey to owning a home through this scheme.
