Shared ownership is a government scheme where you own part of your home with the intention of eventually paying it off. As a result, selling a house like this becomes complicated.
When you sell you have to be careful of following the regulations set out by the housing provider and you also have to have the right timing and strategy for finding a buyer.
In this article, we will be going over how this works and how you can give a successful sale of a shared ownership property.
How does shared ownership work?
It may be unclear what shared ownership is. Do you own the home alongside a partner or a spouse or do you own it alongside a bank.
The truth is neither is true as shared ownership is a government-backed scheme that was set up to help first time buyers.
With this scheme, you can purchase a portion of a property that you would not normally be able to afford and rent the remainder until you can purchase it outright.
So, the other part of the house that you’re sharing is technically with the housing provider.
This is bad if you like the idea of owning your own home but it is not all bad as with a small deposit, you may be able to qualify for a shared ownership mortgage, which has lower monthly mortgage payments.
This can make purchasing a home more affordable, particularly if you have a limited budget. Rather than renting, you could invest in a property that you will eventually own completely.
Is it hard to sell a Shared Ownership property?
Selling a Shared Ownership home requires some additional steps, but your housing association can assist you.
They may have recommended surveyors and photographers for you to use, as well as important information that your buyer will require, such as the Leasehold Information Form.
This form will cost between £200 and £300, which you must pay for on behalf of the buyer.
You must have the property valued by a RICS chartered surveyor before listing it for sale and when selling your home, you may be required to pay both the housing association’s and your own legal fees.
Like all houses, you have to pay tax when you sell a house
How do I sell my Shared Ownership home?
In the below steps, it guides you through exactly how to sell a shared ownership home. From the beginning stages where you have to contact your hosting provider to the later stages where you find a buyer.
It is vital you go through each stage carefully as skipping over a step or not paying attention to the detail may result in you not having a successful sale or running into errors.
Selling a house in any way is a big decision so make sure you’re not cutting any corners.
Contact your housing provider
If you’re looking to sell your shared ownership property, your housing provider or local authority will usually have around eight weeks to try and find a buyer for you.
During this time, they will charge you £350 in marketing fees. This fee will cover expenses such as photographs, floor plans, and advertising for your property.
They will also schedule viewings with potential buyers at a time that is convenient for you. Once a buyer is identified, they will ensure that the buyer meets the mortgage requirements for the property.
Get a valuation
In order to get a valuation for a property, is it recommended to seek out the help of a chartered surveyor as they know how to value a property best and they’re also the most credible.
It may also be the case that the housing association requires a valuation from a chartered surveyor as they will have to lay out their own terms as part of the agreement.
Contract of sale
There is some legal information that will be requested by the housing provider as part of the sale of the property.
The include:
- Your intention to sell the property as a form
- A signed copy of your lease agreement
- A signed copy of the “selling guide sign off” form (serves as proof you consent to and understand the selling process)
- An admin fee to help you market the property
As well as these things that are required by law and supported by professional documentation, there is also the need to choose a photographer from a list of those given to a housing association.
You will also have to produce an EPC that is passing. Note that the grade that is passing for EPC regulations is going up after 2025 from an E pass rate to a C. Find more about this here.
Get an EPC certificate
In the process of selling a shared ownership property requires there to be a valid EPC certificate in the process. This means you’ll have to bring in an energy performance assessor to the property who will conduct an assessment.
Photograph a home
As part of the marketing of a home, taking photographs is essential as this is what most people will base their decision on when it comes to buying a house.
Find a buyer
Buyers can be found through the traffic on an online listing portal and they can also be found from any additional networking that a buyer does as they attempt to look for buyers.
Complete the sale
As the sale of a property is completed, you will have to consider how you will end up signing the relevant documents including a contract of sale.
You will likely have to add in a solicitor in this part of the deal to make sure everything goes smoothly.
Fees for selling a Shared Ownership property
One of the biggest reasons why selling a shared ownership property is deemed difficult is because of the additional fees for the sale of a shared ownership property compared to selling a house with a mortgage.
Housing association marketing fees
These fees are there so that you can market a property effectively to potential buyers. The amount that this is strictly depends on the housing provider that you are signed up with.
Typically, this fee can be anywhere in the region of £100 – £750.
Fees for property valuation
As mentioned previously in the steps you need to take to sell a home, someone from the Royal Institute of Chartered Surveyors will have to come out to your property and then assess what a property is worth.
Solicitor fees
Unless you have a lot of legal knowledge, there is a very good chance that a solicitor will be needed at some point in the journey of selling any house.
Whether that be as you sell a house without an estate agent or you work out the cost of selling a house.
The fee for a leasehold information pack
As part of the regulations surrounding shrewd ownership homes, a property of this nature must have an information pack that is related to it.
This goes over the details surrounding if there are any service charges are and what the ground rent is in the property,
This can cost anywhere from £200 to £1000.
Cost of an Energy Performance Certificate (EPC)
EPC certificates must be in place for anyone who is buying, selling or renting a home. This includes shared ownership properties.
As a result, bringing in someone to conduct an assessment and produce a certificate will cost money (usually in the region of £50 – £100)
Sales fee
A nomination period is the time in which a housing association will market a property you own with their own regulations and pricing. If the property is still not sold after this period then it will be up to the owner to sell it.
Either way, you will be charged because the housing association will take a commission if they manage to sell it and if you sell it yourself you may need to pay an estate agent.
Can you sublet a home under shared ownership?
As a shared owner of a property, there will most likely be a term or a condition within yours agreement with the housing association you have bought the house with that subletting isn’t allowed
If you break these rules and sublet you may have the home repossessed resulting in you losing any ownership of the property you had and erasing any progress you made to pay it off.
What if there’s no buyer at the end of the nomination period?
If a nomination period comes to an end it is now in the hands of the buyer to sell the shared ownership home. This means you can sell it for any price you would like.
However, you will still want to sell it for a higher price so you can get as much of the money you have put into the deal back in your pocket.
This is especially true if you’re selling in an emergency like a lot of buyers do in an attempt to pay something off such as care.
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