SHARED OWNERSHIP

As the leading independent agent in new build and period properties in Scotland Rettie & Co. have access to all the best deals on the market to make home ownership more accessible. Shared ownership is one way to do this.

Shared ownership is a scheme by which you can buy a share of the ownership of a property (normally 25%, 50% or 75%) and then pay a reduced rent on the remainder, often know as an occupancy charge. The percentage ownership is known as a tranch. You own a tranche and the Housing Association owns the remainder. The scheme is designed for people who cannot afford to buy a property on the open market, ideal for first time buyers.

Priority Groups:

There tend to be priority groups for the scheme and where decisions need to be made between applicants, the ones with the highest priority will be offered first option.  Where there are applicants with equal priority, then the housing association/ developer would decide by drawing lots to decide who is offered the properties first.

The priorities areas can be:

Within these groups, applicants with special housing needs will have priority for these properties.

Assessment: 

The Housing Association has to be sure that you can afford to buy the share and also has to prove that you could not afford to buy a flat outright on the open market. They will need evidence of your income and confirmation that you can obtain a mortgage (if applicable).

Responsibilities:

You are responsible for:
	• Paying an Occupancy Charge to the Association • All maintenance and repair costs. • Paying for services provided such as stair cleaning and grounds maintenance and buildings insurance. • Management/Factoring charges.

Occupancy charges: these depend on the proportion of the flat you own. For example, for a 25% tranche, the occupancy charges could range from £156.56 per month to £195.06 per month depending on the size and type of flat. These charges would be reviewed annually. At any review, you can refer the proposed charges to an independent valuer and the cost of this is split between you and the Housing Association.

Mortgages:

Most lenders are happy to consider lending for Shared Ownership.  You may not be granted a mortgage for the full amount of the valuation of the tranche you wish to purchase so you must be prepared to meet some of the cost yourself. You must also make it clear when requesting a loan that it is for Shared Ownership and advise the lender of the occupancy charges so that they can take these into account when assessing your mortgage.

Legal Advice:

You will need a solicitor in order to purchase your tranche. You will be responsible for meeting all your legal costs relevant to this purchase. You will have to pay for your lender's valuation survey.

Other Costs:

There are other related costs that need considered when purchasing a property including:

Council Tax Contents Insurance Removal Costs Stamp Duty

Buying further 'tranches':

You can purchase at least another 25% tranche after one year. You can also buy out the Association's share at any time, thus obtaining full ownership.

Selling:

Please note that, the Housing Association often retain the right to buy back your share if you chose to sell, but many explicity state it is not their policy not to enforce this. If you own a share of the flat and wish to sell you must contact us to either try to sell directly to another buyer or sell the flat on the open market. The proceeds would be split with the Housing Association according to the tranche levels owned.

For further information on Shared Ownership Schemes or for Independant Financial Advice, please call the Rettie & Co. New Homes Sales Team on 0131 220 4160 or register for more details.

Other means of home ownership:

Visit our Shared Equity page for more details.

Rettie & Co Ltd. Registered in Scotland No SC144330.

Registered Office Deuchrie, Dunbar, East Lothian, EH42 1TG.

VAT Reg. No. 593 2816 16

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