In a weekly column, solicitor Juliet Phillips-James casts her
Expert eye over a range of legal matters and urges anyone with any questions or problems to come forward for help.
QAI am a young professional and am struggling to get on the property ladder as house prices are so expensive at the moment. My friend has told me there are schemes in place where you can buy half only of a house and a housing association will buy the other half and this has helped lots of people buy a home. Can you please provide some further information on this. It is likely what your friend is referring to is known as shared ownership. Under shared ownership you will buy a share of a property and another (usually a social housing provider such as a housing association) will buy the other shares. The share you initially purchase can be any amount but is often around 50%.
For example, if the open market value of the property is £210,000 you will provide £105,000, the housing association will then provide the other £105,000. You would then pay rent on the remaining 50% owned by the housing association (the landlord). Effectively, you will be buying a leasehold property and will be subject to terms under a lease.
You are able to purchase further shares up to 100% and this is called “staircasing”. When you own 100% of the shares you can acquire the freehold for no further charge. Your rent will reduce as you purchase further shares.
It is important to remember that if you do not keep up your monthly rental payments, the landlord is able to apply to court to take possession of the property. You would then lose your lease and any money paid for your 50% share.
As with most new-build estates these days you may also be required to pay a service charge to a managing agent who will maintain any shared areas on the estate.
There are usually stringent eligibility criteria to be met and it is a good idea to meet with a local provider to discuss whether you would be eligible for any local schemes.
You can also use a mortgage provider to assist with your purchase. However, not all lenders are willing to lend on this type of scheme and so it is important to provide all necessary information to your broker so they can find the best fit for you.
There are other affordable housing options available and we would suggest you approach your local authority or social housing provider to discuss your options further.