The Merits and Pitfalls of Shared Ownership

Carr & Co’s Property Solicitor and Partner Mark Lynn explains the Merits and Pitfalls of Shared Ownership in property purchases.

Buying a property for the first time is one of the biggest financial commitments you will ever make. It is therefore imperative that when considering whether to purchase a property through a shared ownership scheme to consider the pitfalls before proceeding.

Shared Ownership Schemes are usually run through a Housing Association and involve acquiring an initial share in the property, normally 25 or 50 per cent with the purchaser then paying rent on the part of the property that still belongs to the Housing Association. Those who cannot afford to buy a property outright should
consider such schemes.

The purchaser then has the option to buy further shares in their property as and when they are able, eventually, staircasing their initial percentage share to full ownership. In doing
this, you are investing in your own home rather than just paying rent.

Shared ownership properties enable first time buyers to get on the property ladder and provide them with the merits of owning a property such as security. In contrast to renting, it
also removes the headache of constantly being served with notice to vacate every 12months and the stress of possibly having to find new accommodation.

One of the mains pros of such schemes is that they enable you to buy a larger property than you would otherwise be able to and you may need little or no deposit.
Conversely, there are also a number of disadvantages to these schemes. The problems you experience will normally depend on the terms of the shared ownership scheme. One of the
main issues is that there may be limited properties available for shared ownership in your area but even you do find the right property you may not even qualify for the scheme. You will also have the responsibilities of a homeowner but your home does not only belong to you. As it is not completely yours, there will no doubt be selling restrictions written into the paperwork and you will normally require the permission of the Housing Association should you wish to redevelop or redecorate the property.

Finally, when you have saved the money required to buy further shares in the property the share is normally valued by the Housing Association and you will usually have to pay the fees of the valuation. Therefore, the help and guidance of an experience Solicitor is essential.

For specialist advice on Conveyancing matters please contact Mark Lynn on (0191) 2840363 or


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