Shared ownership is a great way to get onto the property ladder, especially for first-time buyers. Here’s a beginner’s guide to navigating the conveyancing process for shared ownership properties:
Step 1: Get a Mortgage Agreement in Principle
Before you start looking for a property, it’s a good idea to get a mortgage Agreement in Principle (AIP). This shows sellers that you’re serious and financially prepared. Make sure your mortgage lender is experienced in shared ownership mortgages.
Step 2: Find a Shared Ownership Property
Search for shared ownership properties that fit your budget and needs. Housing associations often have listings of available properties. Use tools like shared ownership calculators to check if the property is within your budget.
Step 3: Reserve Your New Home
Once you find a property you like, you’ll need to reserve it by paying a reservation fee. This fee is usually deducted from the share you’re purchasing when the sale goes through.
Step 4: Instruct a Conveyancing Solicitor
Choose a conveyancing solicitor experienced in shared ownership transactions. They will handle the legal aspects of the purchase, including reviewing the Memorandum of Sale and lease terms.
Step 5: Conduct Property Searches
Your solicitor will conduct necessary searches, such as local authority searches and environmental searches, to uncover any potential issues with the property.
Step 6: Exchange Contracts
Once all searches are complete and any issues are resolved, your solicitor will arrange for the exchange of contracts. This creates a legally binding agreement between you and the housing association.
Step 7: Complete the Purchase
Finally, you’ll complete the purchase by paying the remaining balance for your share of the property. Your solicitor will handle the transfer of ownership and ensure everything is registered with the Land Registry.
Key Points to Remember
- Shared Ownership Structure: You purchase a share of the property (usually between 10% and 75%) and pay rent on the remaining share.
- Leasehold Property: Shared ownership properties are always leasehold, so you’ll need to understand the lease terms, including ground rent and service charges.
- Mortgage Approval: Your mortgage lender and the housing association must approve your mortgage offer.
- Staircasing: You have the option to buy additional shares in the property over time, a process known as staircasing.
By following these steps and working with an experienced conveyancing solicitor, you can navigate the shared ownership process smoothly and make your dream of homeownership a reality.
