Information for Home Owners 

What is Shared Ownership?

Shared ownership is a scheme, which has been specifically designed to assist people purchase on the open market.  Through shared ownership, you purchase an initial share of the property usually starting at 50% and pay a rent on the remaining share you do not own.  Gradually you may buy further shares in your home, moving you closer to owning your own home outright.

You will buy your home on a lease, which will initially be 125 years for new homes.  If you were to purchase a property from an existing shared owner (known as a resale), only art of the original term would remain.  The lease explains the rights and responsibilities of the Association and the shared owner.  It contains information on who has responsibility for specific repairs, when and by how much the rent can be increased, how the service charge is calculated as well as details on the things you and the Association can and cannot do.

Why Buy Shared Ownership?

• If you buy through shared ownership, you will own part of your home, rather than paying rent with no return.
• Your monthly mortgage and rent can work out much cheaper than purchasing outright and can work out in some instances not be much more than renting.
• You can buy more shares (after a year) or move when you want to.
• You only purchase what you can afford so you do not overstretch yourself financially.

Do I Qualify?

The majority of first time buyers can take advantage of shared ownership if they cannot afford to buy a home on the open market.  Priority will be given to:

• Council and Housing Association tenants
• Buyers living in the local area or having a connection with the area who are registered on a housing waiting list.
• Key Workers are identified by the Local Authority and / or Central Government.

If you are renting privately or living with your family and friends, you can still apply.

If you have owned a home before, you may still be able to buy through shared ownership if:

You owned a home before with a partner and that relationship broke down or your home became unsuitable for your needs.

• You need to move because of job relocation.
• You are already a shared owner who needs to move and you meet all our other criteria.

If you are a council or housing association tenant, then you will have to give up your tenancy when you buy with LHA.

The list mentioned above is given merely as a guide and is by no means exhaustive.  Each development differs so please do contact the sale and Marketing team to register your interest and to discuss eligibility for the scheme that you are interested in.

You will need to be in permanent place of employment for at least six months or passed a probationary period.  If you are self employed you will need to have at least two years audited accounts.

How do I Obtain a Mortgage?

You are advised to contact a fully Independent Financial Advisor, your bank or building society will need to assess your affordability to ensure that you are fully aware of your financial obligation, therefore in turn giving you piece of mind.

LHA can provide you with details of Financial Advisors.  Although you are free to use your own Financial Advisor, it is helpful to use an organisation with experience of shared ownership.

Please be aware that if your do not keep up repayments on your mortgage your home is at risk from repossession.

What Costs are incurred once I have moved in?

• If you have taken out a mortgage to buy your home there will be a monthly mortgage payment to the lender (this may fluctuate in line with current interest rates)
• Your monthly rent to LHA on the part you do not own (payable monthly in advance).
• A service charge for the buildings insurance, maintenance, and upkeep of communal areas.

Your will also be responsible for the following costs:

• Contents insurance
• Utility bills – such as heating, water, electricity
• Household bills – TV Licence, Council Tax and the Telephone
• General living expenses  - food transport

Even though you do not own the whole property, your responsibilities will be the same as any other homeowner.

What is a service charge and will it apply to me?

The service charge is a monthly charge that may cover items such as cleaning, gardening, repairs, cyclical maintenance, building insurance and the association’s management costs, the items covered will depend on the type of property you buy.  LHA set a budget at the beginning of the financial year to cover the costs we expect to incur.  At the end of the financial year, the accounts are audited and any surplus is returned to the shared owner contributing towards the service charge.  If there is a deficit, the following year’s account will be adjusted to take into account the extra costs.

Since LHA own, the freehold of your home we need to ensure that your home is adequately insured.  We have a block buildings insurance policy that covers all homes and is cheaper than you would get elsewhere.  The costs of this will be recovered through the service charge.

The Association does not insure the contents and fittings of your home and shared owners are advised to arrange their own cover.

Who does the repairs and maintenance?

As a shared owner, you are an owner-occupier not a tenant.  If you live in a house, you are responsible for all repairs to your home.  Your responsibilities and LHA’s are set out within the lease, which your solicitor will fully explain to you before you buy.  If you live in an apartment, you are, responsible for all repairs and maintenance inside your home we will maintain the outside of your apartment and you will pay for this through a service charge.

Can I make improvements or alterations?

You may not make any alterations or improvements to your home unless LHA gives you written permission.  You may also need approval from the Local Authority Planning and Building Department.

If  you purchase further shares in your home, the valuer will disregard any improvements you have made when determining the market value of the property.  However if you decide to sell, any improvements you have made will be included when determining the market value.

How long does it take?

If the property you are buying is completed and ready for occupation at the time of reservation you are given 6 weeks to exchange contracts.  As a first time buyer, this is ample time for your Solicitor and Financial Advisor to finalise your purchase.  After exchange of contracts you will be given a completion date when you can move in (usually two weeks after exchange).

The sales and Marketing team are on hand to help you through the process, answer any questions you may have, monitor your sale and help to make the moving process as stress free as possible for you!

Can I sell my home?

Just like any other homeowner, you may sell your home whenever you choose.  The price you sell your home for will be based on the market value at the time you want to sell.  We will arrange for an independent valuer to value your home and will let you know what he value is.  We also need to make sure your home is made available to others who cannot afford to buy outright, this means for a short period we have the right to find a buyer within the time specified within your lease then you are free to make your own arrangements to sell your home.

You must notify the agent acting for you that the property is shared ownership as the buyer may need to fit specific criteria relating to the scheme.  Please be aware that all selling fees incurred by yourself will be your responsibility.