Share to Buy Expert Sessions: Your questions about the sales process
Shared Ownership Sales Process
What steps do I need to take to purchase a Shared Ownership home?arrow_downward
For buyers looking to get a foot on the property ladder, the world of alternative home ownership schemes can seem overwhelming.
How long does it take to complete the buying process?arrow_downward
The process of buying a new build homes depends on a number of factors, including the length of time required to arrange a mortgage how quickly the solicitors involved can process the sale. Usually it takes around two months from start to finish, however it can take as little as 28 days if everything goes smoothly quickly. However, if you’re buying a home off-plan and building work has yet to be completed on the development, this may lengthen the process.
What is the buying process like when purchasing a resale home compared to buying a new build property?arrow_downward
The overall buying process is very similar, however there are some differences. For example, in order to purchase a new build home, you would need to attend a financial interview whereas this wouldn’t usually be required for a resale home as you need to purchase a share equal to or higher than what the current occupier owns.
I live outside of London and will need to register with my local Help to Buy agent to be eligible for a Shared Ownership home. Should I do this before expressing interest in a property?arrow_downward
Response from JLL – Yes, it is advisable to do so. If you’re interested in a JLL home, our Shared Ownership team can go through the process with you, so give them a call and a sales consultant can guide you through the process!
At what stage would I need to pay my deposit?arrow_downward
Response from L&Q – A 5%/10% deposit of the share you are purchasing (minus the reservation fee already paid) is due at exchange of contracts – 28 days after contract issue or 21 days if the property is built.
What percentage of the share do I need to have deposit on?arrow_downward
Your deposit will usually be 5-10% of the price of the share you’re purchasing, not of the full market value of the whole property. For example, if a property costs £500,000 and you purchase a 25% share – equating to £125,000 – a 5% deposit on your share would be £6,250.
I've seen that Shared Ownership homes often have a minimum deposit - can I choose to pay less?arrow_downward
Response from Southern Home Ownership – You’ll need at least a 5% deposit of the share you are purchasing as mortgage lenders will require this.
Can I choose to put down a larger deposit?arrow_downward
Yes – The minimum deposit is usually around 5% of the share that you are purchasing, but reaching a 10% deposit or higher significantly reduces the interest rate you will be offered on your mortgage.
Is there a maximum deposit I can put down?arrow_downward
Response from Southern Home Ownership – No there isn’t. The bigger deposit you have the bigger the share of the Shared Ownership home you can purchase.
Can I use the Help to Buy ISA or Lifetime ISA to help pay the deposit on a Shared Ownership home?arrow_downward
Yes – both the Help to Buy ISA and Lifetime ISA can be used to purchase a Shared Ownership home.
My savings are in a Lifetime ISA which only allows you to buy a property for under £450,000. If I want to buy a Shared Ownership home, does the full value need to be under that threshold or just the share I'm purchasing?arrow_downward
A Lifetime ISA can be used to purchase a Shared Ownership home, however, the full market value of the property must not exceed £450,000.
How are Shared Ownership homes valued?arrow_downward
Response from Southern Home Ownership – Shared Ownership homes are independently valued by a RICS (Registered Institute of Chartered Surveyors) surveyor and have to be regularly revalued to ensure that they are being sold at the current market value. You can therefore be assured when buying a Shared Ownership property that you aren’t buying a home which is overpriced.
Can I negotiate on the percentage price when buying a Shared Ownership home?arrow_downward
Response from Clarion Housing – Shared Ownership homes are independently valued by a Royal Institute of Chartered Surveyors valuer and they determine the price at which we sell our homes. We are therefore unable to accept offers on Shared Ownership homes
Is it cheaper to purchase a property off-plan?arrow_downward
Response from JLL – There are a lot of factors to take into consideration, and sometimes the prices can rise through the selling period.
What is the minimum share I can buy?arrow_downward
The minimum share you can purchase in a Shared Ownership home is usually 25%. However, certain developments may have slightly higher minimum share requirements, for example 35% or 40%.
If the property is advertised at 40%, can I choose to buy a smaller percentage?arrow_downward
The smallest percentage you can purchase in a Shared Ownership home is usually 25%, however certain developments may have slightly higher minimum percentages, such as 35% or 40%. The percentage advertised is usually the minimum share that can be sold.
If a property is marketed at 25% but I'm told that I can afford to buy 40%, can I still choose to purchase the lower share?arrow_downward
Response from Southern Home Ownership – It’s in your best interest to purchase the maximum share you can afford as determined by the independent financial advisor, so we would always encourage you to purchase the maximum share you can afford.
Some specific developments are only available to those who live in locally - will these be opened up to neighbouring areas? If so, at what stage?arrow_downward
Response from Southern Home Ownership – Yes. There is often local eligibility criteria such as having to live or work in the local borough that typically apply for the first three months before other people from neighbouring areas can apply. As this varies depending on the development, we’d advise checking what the requirements are at the specific development you are interested in.
What is taken into consideration when allocating Shared Ownership homes? Why would one buyer be accepted over another?arrow_downward
Response from JLL – It can depend on a lot of different factors such as the borough you live and/or work in, whether you have children, etc. If you’re interested in a specific property or development, we would recommend speaking with the sales consultant who can give you more information.
How long can I hold a property for after I reserve it?arrow_downward
Response from Clarion Housing – Once you’ve reserved a property, the ball starts rolling and we’ll be asking you to progress matters straight away. You may have a few days cooling off period, please check with the housing association you’re reserving with.
At what stage would I need to pay the reservation/holding fee on a home?arrow_downward
Response from L&Q – Once a property has been allocated to you, a £500 reservation fee will be taken which is offset against the total share payable for your property. However, this amount can vary from provider to provider.
What is the reservation fee for and does it go towards other costs?arrow_downward
Response from L&Q – Your reservation fee is the financial commitment from you to agree to purchase the property. The reservation fee is deducted from the deposit payment required on exchange of contracts.
After submitting an application for a home, how long will it be before I'm notified whether I have been successful?arrow_downward
Response from Southern Home Ownership – At Southern Home Ownership, we will always advise you when you submit your application what the process is and how long you can expect to wait to hear whether you’ve been successful or not. Typically this varies from a couple of days to perhaps a week depending on the popularity of the development.
Does the reservation fee get refunded if I don't get accepted for the home?arrow_downward
Response from Clarion Housing – A reservation fee is taken once you’ve passed an initial affordability assessment. This generally means that you can afford to go ahead and the property you are interested in is available.
Is there a lot of competition for Shared Ownership homes?arrow_downward
Response from SO Resi – Yes sometimes and this depends on the development, location and price. Each site is unique and we can let you know anticipated demand and whether we have any priority groups.
I'm applying for homes but keep being rejected - do you have any advice?arrow_downward
Response from L&Q – This could be dependent on the restrictions of specific developments. For example, you may need to be living or working in the area in order to be eligible to purchase a Shared Ownership property. Please speak with the on site sales team to discuss any specific eligibility criteria.
What kind of admin and legal fees should I expect to pay when purchasing a Shared Ownership home?arrow_downward
This can be subject to considerable variation, however solicitors will always be happy to provide a quotation. Generally, if you budget for around £3,500 then you shouldn’t be too far out.
What questions should buyers be asking in the early stages to make sure they're aware of any potential hidden costs or fee increases such as service charges and ground rent?arrow_downward
Response from JLL – A buyer should ask their solicitor to go through the lease with them and make them aware of any additional costs such as administration charges or fees when staircasing or selling.
How much would you advise I save for fees?arrow_downward
On top of your deposit, other fees may be incurred throughout the process such as removal costs, although these can vary greatly. Housing associations recommend that you have between £3,000 and £5,000 available to cover all the fees and costs of moving, including the solicitors and broker fees.
Would I need to register and apply for the government Help to Buy scheme if I want to buy a Shared Ownership home?arrow_downward
You do not currently need be registered with Help to Buy if you’re looking to buy a Shared Ownership home in London. However, if purchasing outside of London, you’ll be required to register with the local Help to Buy agent.
Is there a list of solicitors that deal with Shared Ownership?arrow_downward
Theoretically speaking, any solicitor dealing with property conveyancing should be able to deal with a Shared Ownership property purchase, however it recommended that you use a firm that has experience in this area. You can check out Share to Buy’s Solicitor Panel for the details of specialist Shared Ownership solicitors.
What is the average rent increase on a Shared Ownership home?arrow_downward
Response from Clarion Housing – Typically the rent increase for Shared Ownership is RPI + 0.5% and increases every April.
Are the Assisted Move and Part Exchange schemes available through all housing associations?arrow_downward
Response from L&Q – No, not all housing associations will offer Part Exchange and Assisted Move. If you’re looking to buy a home, we would recommend researching all the different schemes available to see which is likely to work best for you.
You can then specifically search for properties available through the product you’d like to use, and discuss your buying options with housing associations and providers directly.