In the UK, shared ownership homes are becoming a popular choice for first-time buyers as they provide an inexpensive path to homeownership. However, many shared owners are unsure about what to do when it comes time to sell. There are issues when you sell a shared ownership property in the UK, but with the correct advice, you can handle those issues with ease.
In this guide, we’ll give homeowners and business owners in the UK a step-by-step method on how to sell their shared ownership homes. This guide will assist you in handling the procedure on your own, whether you decide to sell on the open market or selling back to the housing association.
What is a Shared Ownership Property?
Shared ownership property is a government-backed scheme designed to help people who cannot afford to buy a home outright. In a shared ownership arrangement, homeowners buy a share of the property, typically between 25% and 75%, and pay rent on the remaining portion to the housing association. Over time, homeowners can increase their share through a process called “staircasing shared ownership”.
Considering that a housing association partially holds the property. There are several guidelines and procedures to adhere to when it comes time to sell. Selling a shared ownership property can be simplified by being aware of the procedure and making meticulous preparations.
How to Sell a Shared Ownership Property?
Step 1: Read Your Lease Agreement Carefully
It’s important to review your lease agreement before making any decisions. The terms of your lease will specify how you can and cannot sell your shared ownership property. Housing associations typically have “first refusal” rights, which give them the power to either find a new buyer for the property or buy it back. Understanding these conditions will aid in directing the subsequent actions.
Step 2: Process Of Valuation
You will require an independent valuation from a surveyor certified by the Royal Institute of Chartered Surveyors (RICS) to sell your shared ownership property. When you sell a shared ownership home, it’s important to know the property’s current market value, which the valuation will determine. Remember that this valuation applies to both your share and the housing association’s portion. Any sale will start with this report.
Step 3: Notifying Your Housing Association
You will need to inform your housing association of your intention to sell as soon as the valuation is finished. A typical housing association will give you eight to twelve weeks to locate a buyer before allowing you to put the property on the open market. If they are successful in finding a buyer, they will oversee the sale’s execution. If not, you’ll be free to sell on the open market.
Selling Back to the Housing Association
Particularly in situations where there is little demand on the open market or time is of importance, many homeowners under shared ownership decide to sell their property back to the housing association.
How And When to Sell Back To The Housing Association?
Since you’re selling straight to a known buyer, selling back to the housing association may be a smoother process. It’s usually the case that your housing association will take care of most of the paperwork involved in exercising its right to buy back your property, so you won’t have to bother about marketing or finding buyers.
Typical Myths
There is a misconception that housing association members aren’t required to buy back houses. This is untrue—they might decide to, but it’s not guaranteed. You may proceed with selling on the open market if they choose not to exercise their right to purchase.
For Homeowners Having Trouble Selling Their Shared Ownership Home
If you’re facing difficulties selling your shared ownership property, consider lowering your asking price or exploring staircasing options to increase your share and make the property more appealing to potential buyers, whether you’re selling back to the housing association or on the open market.
Selling on the Open Market
You have the option to sell your shared ownership property on the open market if your housing association is unable to find a buyer. Finding possible buyers who are prepared to purchase your portion of the property is part of this procedure.
Step 1: Selecting a Shared Ownership Estate Agent
Selling shared ownership through an agent is not required, but they can make things easier by managing the paperwork, viewings, and negotiations. Choose an estate agent with expertise in selling shared ownership houses if you’ve made up your mind to work with one; they will be aware of the difficulties these sales provide.
Step 2: Advertising and Marketing the Real Estate
The successful sale of your property depends on efficient marketing. To control buyer expectations, emphasise the advantages of shared ownership in your listings and be open and honest about the procedure. Education is essential since many prospective buyers might not be familiar with shared ownership.
Step 3: Fees and Expenses
It costs money to sell a shared ownership property. You should factor in legal fees and perhaps leasehold costs in addition to estate agency fees (if any). Your financial planning also needs to account for the cost of selling shares, which is determined by the percentage of the property that you hold.
Obstacles and Typical Mistakes
Low demand is one issue that many homeowners have when trying to sell shared ownership properties. Because they may not be able to afford the combined costs of a mortgage and rent, some buyers are reluctant to buy a property they won’t entirely own.
Make sure your property is priced competitively based on the market valuation and collaborate with your housing association to successfully market it to avoid delays. If selling is tough for you, think about providing buyers with more incentives or modifying the listing strategy in conjunction with your estate agent.
In summary
Selling a shared ownership property can be a simple procedure if you have the right information and an actionable plan. You may successfully navigate the sale, whether you sell back to the association or on the open market, by being aware of your lease, getting a precise valuation, and cooperating closely with your housing association.
Get in touch with us for additional information about handling your shared ownership sale or for tailored guidance on doing the procedure on your own.
Commonly Asked Questions
1. Can you sell back the housing association your shared ownership?
Yes, you can sell your shared ownership property back to the housing association, but only if they choose to exercise their right of first refusal. If they decide not to, you are free to sell it on the open market.
2. What happens if I am unable to sell my house under shared ownership?
To boost your portion of the property and potentially attract more buyers, you could consider staircasing shared ownership if you’re having trouble selling. Alternatively, you could reduce the price you are asking for.
