Introduction to Shared Ownership Resales
In London’s fast-paced property market, shared ownership resales give homeowners the chance to move, upgrade, or adjust to life changes. While shared ownership is often a path to full homeownership, selling your share can be complex. Whether selling back to a housing association or on the open market, understanding the process is essential. This guide offers practical steps and expert advice to help you navigate shared ownership resales in London with ease.
What is Shared Ownership Resale?
Shared ownership resale refers to selling a shared ownership property you already own a percentage of. Unlike traditional property sales, where full ownership is transferred, with shared ownership resales, you only sell the portion you own.
Why is it Different in London?
London’s property market is known for its high demand and fluctuating property prices. Reselling a shared ownership property in London comes with unique challenges, such as accurately pricing the property and understanding location-specific trends, which can affect market value and buyer interest.
Who Can Sell Shared Ownership?
Eligibility to sell shared ownership properties generally depends on the terms of the original lease agreement. Homeowners in London who are part of a shared ownership scheme can sell their shares, but the process may involve first offering the share to the housing association before listing it on the open market.
Reasons for Selling a Shared Ownership Property
- Outgrowing the Home: Families may outgrow their current space, requiring a larger home.
- Relocating: Many homeowners move to new areas for work, lifestyle, or family reasons.
- Financial Considerations or Staircasing: Some may choose to sell after staircasing (purchasing additional shares) to eventually own outright. Others might sell for financial reasons.
Specific to London:
The fast-paced nature of London’s property market can accelerate the decision to resell. Homeowners may want to take advantage of favorable market conditions or relocate due to the city’s high property costs.
Step-by-Step Guide to Shared Ownership Resales
Step 1: Review Your Lease Agreement
Before proceeding, thoroughly review your lease agreement. Many shared ownership properties have stipulations such as the housing association’s right of first refusal, which means they have the option to buy your share before it’s offered on the open market. In London, this step is particularly crucial due to the competitive nature of the property market.
Step 2: Valuation of Your Property
To determine the value of your share, hire an RICS-accredited surveyor. In London, property prices can vary significantly between boroughs, so getting an accurate valuation is key to ensuring you get the best possible price for your share.
Step 3: Notifying Your Housing Association
Once you’ve decided to sell, inform your housing association. They may exercise their right to buy back your share. In high-demand areas of London, they may be more likely to do so.
Step 4: Selling on the Open Market or to the Housing Association
If the housing association declines to buy your share, you’re free to sell on the open market. At this point, you can engage estate agents to help with the process or manage it independently with proper market research.
Learn How to Sell a Shared Ownership Property in the UK
Selling Shared Ownership Back to the Housing Association
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How the Process Works:
You may be required to offer your share to the housing association first, depending on your lease. If they accept, this can be a more straightforward process with fewer fees.
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Pros And Cons of Selling Shared Ownership Property Back To Housing Association:
Pros:
- Fewer Fees: Selling your shared ownership property back to the housing association usually involves fewer costs, such as avoiding estate agent fees (typically 1-3% of the sale price) and marketing expenses since the housing association handles these internally.
- Quicker Sales: The process is often faster as the housing association knows the property and may already have interested buyers. This reduces the need for lengthy negotiations or waiting for new buyers’ mortgage approvals.
- Less Need for Marketing: You won’t need to invest in property listings, professional photos, or virtual tours, as the housing association takes care of the resale, saving you time and money.
Cons:
- Lower Valuation: Selling back to the housing association might mean a lower offer compared to selling on the open market. Housing associations follow strict valuation rules, and unlike the open market, where competition can drive up prices, you may not get the highest return for your property.
Selling Shared Ownership on the Open Market
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Marketing the Property:
If the housing association does not buy your share, you’ll need to market it. Use platforms such as Share to Buy, Zoopla, or Rightmove, which specialize in shared ownership properties. In London, professional photography, virtual tours, and highlighting proximity to transport links and amenities can significantly boost interest.
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Choosing the Right Estate Agent:
While using a shared ownership estate agent isn’t always necessary, it can help in high-demand areas like London. They bring expertise and resources that make the process smoother and more efficient.
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Costs Involved in Selling on the Open Market:
- Legal fees: £1,000–£1,500.
- Estate agent fees: 1–3% of the sale price.
- Additional administrative costs related to shared ownership paperwork.
Common Pitfalls and How to Avoid Them
Challenges in Selling Shared Ownership Properties in London:
- Low interest in resales.
- Price discrepancies between your share and the current market value.
Solutions:
- Adjusting the Asking Price: If there’s little interest, consider lowering the price or offering additional incentives.
- Exploring Staircasing: If you haven’t already, staircasing can make the property more attractive to buyers.
- Leveraging London-Specific Demand: Highlight the property’s location, particularly proximity to transport, schools, and employment hubs.
Conclusion
Selling a shared ownership property in London can be straightforward with the right preparation. Understanding your lease, getting an accurate valuation, and deciding whether to sell back to the housing association or on the open market are key steps. Whether selling independently or with expert help, careful planning is essential.
Need expert advice or a personalized valuation? Contact us today to get started with your shared ownership resale in London.
Also read everty thing about selling a shared property in London
Frequently Asked Questions About Shared Ownership Resales
Can I Sell My Shared Ownership Property Back to the Housing Association?
Yes, if the housing association exercises its right of first refusal, they can buy your share before you list it on the open market. Selling back to the housing association may be quicker and involve fewer fees, but the valuation might be lower compared to selling with a shared ownership estate agent.
What If I Can’t Sell My Shared Ownership Property?
If you can’t sell, consider lowering your asking price or staircasing to make the property more appealing. You can also work with shared ownership estate agents or negotiate with the housing association for a direct resale. Review your lease for any additional options.
What Are the Costs of Selling Shared Ownership Properties in London?
Costs include:
- Valuation Fees: £250-£500 for a RICS-accredited valuation.
- Estate Agent Fees: 1-3% of the sale price if sold on the open market.
- Legal Fees: Around £1,000-£1,500 for conveyancing.
- Housing Association Fees: Often 1-2% of the sale price or a flat fee for administrative costs.
How Long Does It Take to Sell Shared Ownership Properties in London?
It typically takes 6-12 weeks, depending on market demand and the housing association’s involvement. Selling back to the housing association could shorten the process to a month, while selling on the open market might take longer depending on competition and buyer interest.
