02. Shared ownership
Shared ownership is a unique form of property ownership that allows individuals to purchase a share of a property while paying rent on the remaining portion. This arrangement is designed to make homeownership more accessible, especially for those who may not afford to buy a property outright.
Key Features of Shared Ownership:
| Ownership share | You own a specific percentage (share) of the property, typically between 25% and 75%. The remaining share is owned by a housing association or developer. |
| Rent on unowned share | You pay rent on the share of the property that you do not own. The rental amount is determined by the housing association or developer. |
| Increasing ownership | Over time, you have the opportunity to buy additional shares of the property, a process known as "staircasing." As you buy more shares, your rent decreases. |
| Responsibilities | You are responsible for maintenance and repairs on your owned share of the property. The housing association or developer handles the rest. |
| Lease length | Similar to traditional leasehold properties, shared ownership properties have a lease agreement with a specific duration. |
Determining rent and ownership costs
In a shared ownership arrangement, you will need to pay rent on the portion of the property you do not own. Additionally, you will have the option to buy more shares in the property to reduce your rent over time.
Staircasing
Staircasing allows you to increase your ownership share and decrease the amount of rent you pay. This can be done in increments until you eventually own the property outright.
Obligations and responsibilities
As a shared owner, you are responsible for maintaining and repairing your owned share of the property. The housing association or developer takes care of communal areas and the remainder of the property.
Reviewing lease terms
Carefully review the lease agreement to understand the terms, including the initial share purchased, rent amount, and conditions for staircasing.
Consulting legal professionals
Shared ownership can involve legal intricacies, and it is wise to consult with a conveyancer or solicitor. They can provide insights into the lease terms, your rights, responsibilities, and the process of staircasing. Seeking professional advice ensures you make informed decisions about your shared ownership property and future ownership goals.