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In a shared ownership property, the buyers pay a mortgage on the share of the houser they own and pays rent to a housing association on the remaining amount. Because the buyer only needs a mortgage for the part of the home they’re buying, the amount of money needed to secure a mortgage is usually much less than it would be when buying a whole property. In addition, the buyer has the chance to increase their shares during their time at the property, via a process known as “stair casing”.
How easy is it to sell shared ownership properties?
Assistant Director of sales and marketing at housing association Aster Group, Amy Nettleton told Express.co.uk how new needs which arose during the pandemic has increased the demand for shared ownership.
Ms Nettleton said: “The pandemic, and the experience of living and working at home, has changed what a lot of people are looking for in a property – they want more space, a garden, or maybe even just a change in scene after months of isolation.
“This is where shared ownership will come into its own for many as they are far more likely to be able to afford the larger space they want than with a traditional mortgage or through renting.
“As a result, I believe we could see a new demographic of home buyers entering the shared ownership market as people look to more rural areas in search of larger, more affordable homes with outdoor space.”
And according to Ms Nettleton, selling a shared ownership property isn’t as hard as people have been led to believe.
She explained: “It’s a myth that shared owners don’t have the option to sell if they want to – they can.
“While some people will want to increase the size of their stake in the property and work towards full ownership, this isn’t necessarily the right option for everyone.
“The model caters for both, and those who don’t want a staircase to full ownership can sell their property.
“Normally, there is a nomination period where the home is offered to other shared ownership buyers first, but, if one can’t be found it can then be sold on the open market.”
However, according to CEO and co-founder of StepLadder Matthew Addison, even though selling a shared ownership property is doable, it’s a bit more complicated than selling a normal house.
Mr Addison told Express.co.uk: “Complications can undoubtedly arise when trying to sell any property, but for shared ownership, it can often be a little bit more difficult than usual.”
As opposed to the selling of a normal property, the percentage of the stake you own has to be taken into account with shared ownership, which will decide what kind of value you’re able to try and get.
Mr Addison continued: “As well as this, oftentimes with shared ownership you’re contracted to use a certain surveyor for when you want your home evaluated.
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“There have been cases of under-evaluation, so prospective buyers must make sure they’re not tied to a property they’re unable to sell easily and feasibly.”
When asked if it’s easier to sell your share of the property or buy the remaining shares and sell the whole thing on the market, Mr Addison said: “Realistically, and unfortunately, life is probably going to move faster than the speed it would take to buy out the whole property, so it’s likely at some point you’ll be looking to sell your share.”
The CEO said people shouldn’t be afraid to sell if they feel it’s the right move for them and their life.
In addition to the complications, there are restrictions on who you can sell the shared ownership property to.
These restrictions include income caps among other factors while owning 100 percent of the property removes these constraints.
Mr Addison concluded: “As with everything, ask the right experts and get solid advice.
“Don’t forget that if you can adopt a good staircasing strategy for the duration of your ownership, your equity should increase vs when you bought.
“This will ultimately provide you with more options as you move on to your next property.”
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