Can I buy any property on a Shared Ownership basis?
No, shared ownership is only available on specific, purpose built new build property or properties that are owned using shared ownership where the buyer wants to sell the share they own.
Does Shared Ownership mean sharing with someone else?
You are welcome to buy with your partner, friend, or sibling if you wish you may need to consider a legal agreement in some circumstances, but your solicitor will be able to discuss this with you. Shared ownership does not mean you have to share the ownership of your property with a stranger.
What is Staircasing?
Staircasing is the process of buying more shares in your property, you can buy additional shares at any time. The price you pay for the extra shares you wish to buy is determined by a RICS valuation, payable by you. You can staircase any amount until staircasing to 100% ownership. Buying more of your home reduces the rent you pay to us. Buying in a rising market will mean you pay more for your additional share than you did when you bought your initial share but in a depressed market this could be the same or lower. Before buying more shares in your home, be aware of your long-term plans, the higher the share you own, the less people will be able to afford to buy your home if you were to sell. If you aim to have the property until you own outright, then buy as much as you can afford when the market value is at a level you are comfortable with. New legislation introduced in 2021, allows you the option when buying your initial share to buy 1% extra share each year for up to 15years, the price of each years 1% increase is based on the initial value with an increase based on the RPI. Details will be in your lease if your property qualifies for the new legislation.
What is a Resale?
A resale is a pre-owned shared ownership property in which the person living there wants to sell the share they own.
How can I sell my Shared Ownership property?
It is possible to sell the share you own in your property. To do this a current RICS valuation needs to be undertaken, payable by you to establish the current market value of your home. This will determine the value of your share. Once we have this, and you are happy to proceed, then we can market your home to find a suitable buyer to buy your share or more if they can afford to. The buyer must meet the shared ownership eligibility criteria in the same way you did when you bought your home. We have four weeks to find a buyer and if we have not done so in that time, you can continue marketing with us, or you can instruct an Estate Agent, paying their fees to find a buyer. If you own the property outright, buying the remaining shares in your home through staircasing, you must sell your home via an Estate Agent.
What is a Service Charge?
A service charge is an annual payment made by the resident towards the costs of services and repairs beyond those specifically for your home. For example, if you live in a block of flats with a communal garden, the cost of maintaining the garden is covered by the service charge because it is available to all residents as a communal facility and it is outside of their flats. The maintenance and repair of the building, lift, and communal areas of the building would also be covered. The payment is paid in twelve equal monthly payments.
What is included in the Service Charge?
These services depend on where you live. They may include – but are not limited to – the following:
- cleaning and maintaining the communal areas.
- communal areas: lighting, heating, and water where applicable
- energy costs – administration, management and maintenance of communal heating and hot water systems where applicable
- caretaking, warden services and security
- repairs and improvements
- lift maintenance and telephone line for lift emergency line.
- maintaining door and gate entry systems
- health and safety assessments, inspections, and monitoring
- estate, car park, garden, and grounds maintenance
- audit fees
- bin hires, skips, removal of large items, refuse, graffiti, and vermin control
- estate management fees
- communal building insurance
- reserve fund (sometimes referred to as sinking fund) towards the cost of cyclical repairs or major works. It is for the long-term upkeep of major repairs.
Your solicitor will discuss the specific items included in your service charge. New legislation introduced in 2021 puts the repair obligation up to £500 each year with us for the initial 10years from the build completion date of the property. This should keep service charges lower for the first 10years of the life of the building.
How are Service Charges calculated?
Leaseholders are charged a variable service charge, as detailed in your lease agreement. This means that we estimate your service charge cost over the year. Our year starts on 1st April each year. We charge you this estimate amount in twelve equal monthly payments. Then, at the end of the financial year, we work out the actual costs incurred on the development your home is located and compare the difference. The outcome of this comparison will result in either a credit to your account, or you will be asked to pay for any deficits.
As you will appreciate, there are many reasons why the initial estimated service charge might change during the year. We try to be as precise as possible, but we have to estimate for some costs like utilities, maintenance or repairs. We will send you a written statement showing the service charge income and expenditure no later than 30 September each year. New legislation introduced in 2021 which put the repair obligation up to £500 each year with us for the initial 10 years from the build completion date of the building.
How is the rent calculated on the share I do not own?
The rent payable is on the share the council owns. The amount of rent you pay on your shared ownership property will vary for each home depending on the share bought and the value of the property when you buy it. The higher the percentage share owned by the resident, the lower the rent paid. You pay the rent in twelve equal monthly payments. Your rent increases annually on the 1st April in line with the Retail Price Index (RPI) inflation rate, along with an uplift usually between 0.5% and 2% – please check your lease with your solicitor for the exact details.
Do I need contents insurance?
We cover the buildings insurance, but it is your responsibility to take insurance that covers the contents of your home. We would strongly recommend that you do take contents insurance and review the level of cover annually to ensure it meets your requirements.
Can I make adaptations/alterations or home improvements to my Shared Ownership property?
You may decorate your property and use your creative flair to make it your home. However, any major home improvements or structural alterations will need to have the permission of us and / or the freeholder of the building. Some work may need building control approval, electrical certificates and may need stage inspections by our surveyors. If you live in a building with communal heating or hot water, changing bathrooms or kitchens require approval to prevent damage to the communal system which impact the whole building and you could be responsible for the cost of repairing any damage. Permission will be subject to ensuring consideration is given to your neighbours when undertaking work.
Does a Shared Ownership property come with a building warranty?
Yes, all our homes have a 10year building warranty, valid from the completion of the building. Our building warranties are usually provided by NHBC, Premier Guarantee or Local Authority Building Control (LABC)– if you are in the process of buying a home, from us you can check with us which warranty will apply to the development at which you are purchasing. Building warranties such as these protect us the landlord and our homeowners in case there are structural problems with the building.
What is the Defect Liability Period?
The building warranty requires the developer to rectify any defects that occur in your home in the first year from the day the developer handed the property over to us not the day you moved in. For example, if your property was handed over to us in June 21 but you completed your purchase in September 21 then the end of DLP would be June 22. The 12month period is commonly referred to as the Defect Liability Period (DLP). Towards the end of the DLP the developer will arrange to visit your home to carry out an inspection and agree a plan of action to rectify any defects.
Do Shared Ownership properties come with parking spaces?
Our homes are located within London where land is expensive, therefore often our homes do not come with parking as we want to keep the cost of our homes as low as possible to be able to offer you a quality home at an affordable price. Often planning approvals for new build developments are only granted without parking and in most cases, you will not be eligible for a resident parking permit unless you have a disabled blue badge. However, we always provide a cycle store and there are many car clubs across the brough as we aim to support the Mayor of London’s actions to tackle air pollution across London.
Can I have a lodger or sub-let my Shared Ownership property?
Most shared ownership leases do not allow you to sublet your home; shared ownership is an affordable home ownership product for you to live in, however lodgers are often allowed providing you gain permission from us and that you ensure they agree to the terms and conditions of your lease and do not cause nuisance or anti-social behaviour to your neighbours. You will need to inform your mortgage lender and your Insurer of your contents policy that you have a lodger.
Can I have a pet live with me in my Shared Ownership property?
We do understand that your pet is an important part of your life, however, we must also consider the impact pets may have within our buildings and wider estate. Pets are accepted in some of our properties, but you must gain permission from us to have them living with you. You will need to sign our pet agreement ensuring you look after them and that they do not cause a nuisance or enjoyment of the building and estate to your neighbours. The best thing is to ask us before you buy as we know how important this can be to you.