Share to Buy Expert Sessions: Your questions about selling and buying shares

Answering your questions about selling and buying more of your home!

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Shared Ownership Sales and Staircasing

Can I increase the percentage share that I own over time? Can I ever own 100% of my home?
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Yes – once you’ve moved into your Shared Ownership property you are able to buy more shares through a process known as staircasing. This will increase the share of the property you own and decrease the rent you pay. In most cases, you can go on to buy 100% of your property.

After how long can I buy more shares in my home?
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You can buy more shares in your home at any point. While you’ll need to check the terms of your lease for any potential restrictions to the process, you are generally given the opportunity to staircase three times in your home. These will often need to be bought in chunks of 10% or more, and the final share you buy will need to bring you to the maximum share you are allowed to purchase

Find out more about the staircasing process here.

Do all Shared Ownership properties allow you to staircase?
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While there aren’t limitations in the majority of cases, there may be some restrictions on the upper cap for some homes. We would recommend discussing this with your housing provider before purchasing a home, or referring to the terms of your lease if you’re a current Shared Owner.

Find out more about the staircasing process here.

Are there limitations on how many shares you can buy at any one time?
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While you’ll need to check the terms of your lease for any potential restrictions to the process, you are generally given the opportunity to staircase three times in your home.

These will often need to be bought in chunks of 10% or more, and the final share you buy will need to bring you to the maximum share you are allowed to purchase. It is therefore sensible from a financial point of view to staircase in the largest steps that you can manage.

You can find out more about the staircasing process here.

If I buy more shares, does my rent decrease? What about my mortgage payments?
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The greater the share you buy in your home the less rent you will pay to your housing association, while your mortgage payment will increase.

If you staircase to 100% you become an outright owner and no longer pay any rent, just your mortgage and any service charges/ground rent.
If I buy more shares, would I pay at the current market rate?
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Response from Southern Home Ownership – Yes. When you decide to buy more shares in your home you’ll be required to get an independent RICS qualified surveyor to value the property. This will determine the value of the share you want to buy.

If I want to increase my share, do I have to go through a reassessment with my mortgage company? How would the total cost of my property be valued at the time?
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Your mortgage lender will go through the same affordability calculations and credit checks as when you originally purchased the property. In fact it is often worth checking whether you could obtain a better mortgage deal by re-mortgaging to a different lender; however this is not likely to be worthwhile if you are still in a fixed rate mortgage scheme. Your home will be revalued by an Independent Chartered Surveyor, it is also likely that the mortgage company would want another valuation.
After a valuation has taken place, how long is this valid for?
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Response from Southern Home Ownership – A valuation is usually valid for three months.

What sort of fees are associated with staircasing?
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Response from Southern Home Ownership – You’ll have to cover the valuation fee and as it is a legal transaction, you will have to appoint a solicitor that specialises in staircasing who will also charge a fee.

What happens if I outgrow my Shared Ownership home? What are my next steps?
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If you have outgrown your Shared Ownership home, you can choose to sell at any time. You would need to make your housing provider aware and, under the terms of her lease, they will normally have a set period of time (usually around eight weeks) to try and find a buyer for your home first. You can check out our guide to selling shares here. 

However, as a first port of call, we would recommend that you contact your provider directly to explain your current situation and needs; they will be able to advise if they offer any particular processes to upsize a home.

How do I go about selling my Shared Ownership home?
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If you choose to sell your Shared Ownership home, you will need to contact your housing association to make them aware. You’ll also need to obtain an independent valuation prior to sale to determine the current value of the property. You can find out more about the process of selling your Shared Ownership home here.

Generally speaking, your provider will have around an eight week period to market your home first and, if they find a buyer, they will go through a similar process to the one you went through when you bought the home. If your provider doesn’t find a buyer during this time, you can then choose to sell your property privately or through an estate agent of your choice. If you would like to advertise your home on Share to Buy’s property portal, you can find out more here.

Can I sell my shares at any time or is there a minimum time I must own before I sell?
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You can sell whenever you like and there is no minimum share percentage you must reach, however, it’s worth remembering that you will need to sell your home to another Shared Ownership buyer who is purchasing shares equal to or higher than what you currently own. You can find out more about the process of selling your Shared Ownership home here.

Would the housing association sell on my behalf or can I sell my home privately?
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Generally speaking, your provider will have around an eight week period to market your home first and, if they find a buyer, they will go through a similar process to the one you went through when you bought the home. If your provider doesn’t find a buyer during this time, you can then choose to sell your property privately or through an estate agent of your choice.

If you would like to advertise your home on Share to Buy’s property portal, you can find out more here.

Would the housing association charge a fee for selling my home?
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Response from Southern Home Ownership – Yes, most housing associations will charge a fee for finding someone to buy your share of your home. The fees will vary from each housing association so we’d advise contacting your provider to find out what their fees are.

How is the money split between myself and the housing association if I sell my home?
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Response from Southern Home Ownership – You will be required, in the first instance, to allow your housing association the chance to find someone to buy your home. If after a period of time (usually eight weeks although this will be outlined in the terms of your lease) they’ve been unable to find someone to buy your share, you are able to sell the property on the open market and you get back your share and the housing association gets back their share.

You can find out more about the process of selling your Shared Ownership home here.

Will I ever have the option to sell my Shared Ownership home on the open market?
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Response from SO Resi – If you choose to sell your home and we aren’t able to sell on your behalf within the set eight week period (duration may vary from provider to provider, please check the terms of your lease), you can sell on the open market. Contact your housing association for further guidance on the selling process.

If I choose to sell my home, does the housing association have a say in how much the share should be sold for or is it all determined by a surveyor?
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When you decide to sell your share of your home, you’ll be required to get an independent RICS qualified surveyor to value the property which will determine the value of your share.
If I want to move or sell my share is there a risk I could lose money if the property value has decreased?
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Response from Southern Home Ownership – When you decide to sell your share of your home, you’ll be required to get an independent RICS qualified surveyor to value the property which will determine the value of your share. Therefore it is important to understand that, like with any home purchase, the value of your share could go down as well as up.

What happens to the price of my home if the market dips?
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Response from SO Resi – Property prices may go up or down. Whether you are selling or buying more shares, the value of your home is based on it’s current market value. You would need to ask an independent RICS surveyor to carry out an up to date valuation of your home. You can also contact your housing association for further guidance.

Is it easier to sell a Shared Ownership home if I staircase and buy 100% of the property?
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Response from JLL – Not always, although it does mean that you can put it on the open market rather than selling as Shared Ownership. For instance, you could choose to instruct JLL to sell it on your behalf, whereby anyone can purchase it.

You can find out more about the process of selling your Shared Ownership home here.

If I sell my Shared Ownership home, can I then buy a Help to Buy or outright sale property?
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For now, as long as you meet any relevant eligibility criteria and affordability – and can prove that you’re in the process of selling your Shared Ownership home – you can go on to buy a Help to Buy home.

However, the Help to Buy equity loan in it’s current form is due to end in April 2021. The scheme is due to be replaced with a new version running from April 2021 to March 2023, restricted to first time buyers only.

I have just put my Shared Ownership home up for sale. Do I need to have an offer on my current home before reserving another through the scheme?
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Response from Southern Home Ownership – At Southern Home Ownership, we recognise that people’s circumstances and requirements change over time and so we’re very happy to help people move on and buy another Shared Ownership home. We ask that you have a confirmed buyer in place before reserving one of our Shared Ownership homes!

Do you have any information on programmes available from housing associations to help their current owners move to a new home?
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Response from Southern Home Ownership – At Southern Home Ownership, we have an award winning initiative call Second Steps to help current Shared Ownership who have outgrown their home. Second Steps allows you to sell your current home and purchase a new home within London on the open market.

Our sales service team assists with the sale of your existing home and we also help with the onward purchase of your new home under the terms of the Shared Ownership initiative.

Find out more about the Second Steps scheme here.