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Warning: These articles were originally published as brief newspaper articles. The articles are not intended to be definitive advice on any particular set of circumstances. The authors and the firm of Nicholson Portnell accept no liability for any use of these articles. Specific legal advice should always be sought in all cases for any actual transactions or matters.

Shared Ownership, The First Step On The Property Ladder - June 2010

John Humble

Shared ownership is the main product provided by the Government to help first time buyers and other groups of people, take the first step on the property ladder, and to own a separate share of the market value of their home.

The buyer shares ownership with a housing association or developer. Shared ownership does not mean sharing with other people who live in the same property, such as friends or family.

Shared ownership is a great way into home ownership and is the main affordable housing scheme. If you cannot afford to buy outright, you can part buy and part rent your property. First of all you buy a 25% share (or other share) in the property under a long lease and then you pay a market rent, often reviewed annually, on the share that remains un-bought, so that the larger share that is bought, the less rent there is to pay.

When you can afford to buy more shares the lease provides that you can do so. You have a right at anytime to acquire (“staircase”) further shares in the property based upon the market value of the property from time to time. Those shares, depending on the terms of the lease, can be as small as 10% in some schemes.

When the 100% share has been purchased by this method of staircasing you can have the freehold of the property transferred at nil consideration. If, however, you wish to sell your part share of your home, you can at anytime, as long as you comply with certain procedures laid down under your lease by the housing association or developer.

Mortgages are available from certain lenders for the purchase of the initial share and subsequent shares.

We would be happy to advise more fully on these matters.

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