Process of Purchasing Shared Ownership Property
Once the property has been decided upon and the price has been agreed, the actual conveyancing process is similar to that of any other property purchase. Despite the similar conveyancing issues, there are some additional steps that have to be taken, when attempting to purchase a shared ownership property.
Housing Association Properties
Once you have seen a property that you would like to purchase as part of a shared ownership scheme, one of the first things you have to do is write a letter of intent informing the relevant housing association that you are interested in purchasing the property in question. The letter needs to state your case as to why you feel you would be a good candidate for shared ownership and would typically include information such as where you currently live, your income, the people whom you intend to live with and any other relevant points such as why you are not able to purchase at full market value, as well as any links that you have with the locality.
Bear in mind that if there are several people all trying to secure the same property, the housing association will have to select the most eligible application based on the set criteria. So, it is important that you spend considerable time and thought making sure that the letter is as accurate and as detailed as possible.
The housing association will treat your letter of intent as a guarantee that you want to purchase the property. Consequently, make sure that you have considered whether you can continue financially with the sale, should you be selected by the housing association. When it comes to a housing association property, the price is set by an independent valuation and cannot be negotiated.
Resale and Properties from Developers
When it comes to resale properties, some will end up being sold through the housing association that originally sold the property. In this case, they will be sold in the same way as the housing association properties mentioned above.
If the current owner opts to sell their shared ownership through an estate agent, in a traditional manner, then the situation is very similar to any other sale where the price is negotiable by anyone who wishes to make the purchase. In this instance, you need to consider the remaining lease on the rental part as part of your calculation in a similar way to any other leasehold property.
When purchasing directly from a housing association, it is be necessary to forward a letter of intent stating why you should be allowed to purchase the property;
this letter will be used to check eligibility and to decide between multiple applicants;
there is no negotiation when it comes to the price of a shared ownership sold by a housing association;
with a private seller of a shared ownership property, there is more flexibility in terms of price and conditions, but beware of the length of the lease remaining.