Shared ownership: frequently asked questionsEverything you need to know about buying a share of your home
Are there any upfront costs?
There is no fee to pay to us directly. However, you will need funds for other costs associated with buying or moving home, such as:
- Mortgage deposit
- Mortgage arrangement fees
- Solicitor and legal fees
- Removal costs
What are the monthly costs?
In addition to your household bills, you will normally pay monthly rental fees for the share of your home we retain and your mortgage payments on the share you own. Monthly rent is usually calculated at 2.75% per year of our share, for example:
- Your home is valued at £200,000
- You buy a 50% share, so £100,000
- We retain a 50% share, equal to £100, 000
- The annual rent would be 2.75% of £100,000 which is £2,750
- The monthly rent you would pay would be £229.17
On some properties you may need to pay an additional service charge. Your solicitors will make sure you are aware of any additional fees in addition to these.
What does a service charge cover?
Service charges usually cover the costs of things like estate and ground fees, the upkeep of internal and external communal areas and may also include insurance.
Is Stamp Duty Land Tax (SDLT) payable?
You would usually only need to pay SDLT on the share you are buying and not for the full property value. However, as rules and limits on SDLT thresholds are subject to change you should check what the current rules are before going ahead.
Do I need insurance?
We provide buildings insurance. How much you pay for this differs by each property, so we would let you know what you could expect to pay. It is your responsibility to arrange contents insurance, and we strongly recommend that you do.
Why is the home sold as leasehold?
All shared ownership homes are sold on a leasehold basis, whether it is a house, bungalow or apartment. This is because we are your landlord for the share we retain. If you staircase to 100% and become the sole owner, usually the freehold will be transferred to you and the shared ownership lease will end.
Can I sublet my property to someone else?
Subletting of the whole home is not allowed in shared ownership properties, however, you may be allowed to let a room within your home. You will need to ask permission first though.
What happens to my share if I die?
You should make arrangements in your will to make sure any of your assets are passed to whoever you want your beneficiary to be.
Can I transfer my lease to someone else?
Yes. This usually happens as part of the selling process, but there may be other times when you want to transfer your lease (or your share of the lease if you’re a shared owner).
You’ll need to appoint a solicitor and we’ll need to agree to the transfer in writing.
Do I need to tell you if you are re-mortgaging?
Yes, you need to let us know if you take out a new mortgage. If you own a share of your home, you’ll need a consent to re-mortgage notice from us.
How do I make a claim on buildings insurance?
You will need to contact us and we will be able to provide you with the latest insurance documents. In most cases, you would contact the insurers and deal with them directly. This makes the process quicker and more transparent.
What are my rights and responsibilities?
Your rights and responsibilities are set out in your lease agreement. Leases differ for most properties so make sure you refer to the actual lease for your home. All of the terms and conditions will be listed in your lease but if you are not sure about anything in particular please get in touch.
Will I ever stop paying rent?
You will pay rent for as long as we have a share in your home. If you eventually purchase 100% of the property then you will not have to pay rent but may still have to continue paying any service charges where applicable.
What happens if I miss any rental payments?
If you are struggling to pay your rent you should contact us straight away. We have people who will be able to help you. Your rent forms part of your contract with Connect Housing and failure to pay this could end in you losing your home but we will do everything we can to make sure this doesn’t happen.
Can I buy further shares?
In most cases you can purchase further shares up to 100%, and then you will own your home outright. There are a few properties where this is not possible because of the types of lease but if this is the case then you will be made aware of this before buying. There are costs associated with buying further shares in your home that you should be aware of such as valuations, legal and mortgage fees.
Can I move in the future?
Yes, you can sell your share of the home in a very similar way to how you’d normally sell a house. To start with you would get the property valued by a RICS surveyor and then instruct an estate agent to market your share at the valued price. Viewings and offers would be managed in the usual way with any buyers being asked to complete an application form and subject to the same eligibility criteria you had to meet when you first bought shares in your home.
Once everything is agreed, the sale goes ahead as normal. Each sale is different but you should allow at least 12 weeks from sale to completion. You must let us know before starting the sales process to avoid any delays in the sale.