Selling your shared-ownership home

Shared ownership is a no-brainer for many first-time buyers. But when you come to sell, know the rules, warns David Spittles
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With the average first-time buyer deposit in the capital at a record high of £64,000, the cheaper shared-ownership route on to the property ladder becomes irresistible. Buy a part-share from a housing association and you get to live in a newly built home that would be impossible to buy outright.

Buying your shared-ownership home
700 new homes are being built by housing association A2 Dominion at Green Man Lane, Ealing, with the latest phase just launched. Call 020 8579 4080

Housing associations have reduced the minimum share that can be bought to 25 per cent, meaning in most cases a deposit of less than £5,000 is needed, while the combined monthly payments — rent and mortgage — are less than a full mortgage repayment.

More than a third of part-buyers go on to "staircase" to 100 per cent ownership, proving shared ownership is an affordable option, according to the National Housing Federation.

Yet for it to work there needs to be a buoyant resale market. People want to move on or trade up and take any profit with them. Housing associations like to see this mobility and are keen for others to benefit from low-cost home ownership, so they stipulate that sellers give them an exclusive period in which to find a suitable buyer.

"The resale market is thriving, with more people looking for slightly older properties," says Kush Rawal, assistant director at Thames Valley Housing. "At any given time we have about 100 homes on the market and most sell within three weeks."

Typically, associations want an eight-week window in which to find a buyer. A qualified surveyor is appointed to value the home. Sellers who dispute the valuation are asked to get three comparable examples, and then a discussion about value starts. Sellers have to pay the valuation fee, about £200, plus their legal costs. If you have made home improvements, this will be reflected in the valuation. Normally associations charge 1.25 per cent for finding a buyer, which can come as a bit of a shock to sellers.

Resale fees
In 2013, management accountant Amy Hill, 32, sold the one-bedroom flat in Pimlico she bought from A2 Dominion in July 2009. She paid £82,500 for a 25 per cent share (full value, £330,000), but this had risen in value to £106,250 (full value, £425,000).

"I was happy with that, it helped me to trade up to a house, but I was taken aback by the charges levied. A2 Dominion's 1.25 per cent commission applied to the full market price, not the 25 per cent share that I owned."

She had expected to pay commission of £1,031.25, but was charged £5,312.50 in addition to A2 Dominion's legal fees, bringing the amount to £6,843. She also had to pay her own legal fees of £651 plus a valuation fee of £161, bringing total costs to £7,655 and leaving her with a profit of £16,095.

"Some other housing associations charge less — one per cent on the equity owned, which would be a huge saving," argued Ms Hill, who has gone on to buy a three-bedroom house at Motspur Park, south-west London. "I'm still a fan of shared ownership and would recommend it to friends, but it's a good idea to look at the small print."

Buying your shared-ownership home
From £91,000: for a 50 per cent share of a flat at The Works, Houslow, by A2 Dominion. Call 0800 783 2159
However, A2 Dominion said: "The fees we charge are normal for shared-ownership resales. Housing associations manage the entire resale process from start to finish, providing a service similar to an estate agent. Costs are presented to buyers in their lease agreements."

Shared-ownership homes for sale: Ealing and Hounslow
The association has unveiled a new phase at Green Man Lane estate in Ealing, bringing more than 700 new homes designed by Conran Architects close to the new West Ealing Crossrail station. Call 020 8579 4080.

Another new launch is The Works, Hounslow, a range of apartments and townhouses. Prices start at £91,000 for a 50 per cent share. Call 0800 783 2159 for more details.

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