A lot of people don’t realise that you can buy older homes through Shared Ownership, known as Resales. So our Help to Buy Manager, Mike, has written this handy blog explaining the benefits of Shared Ownership Resales.
What is a Shared Ownership Resale?
As you’d expect, a Resale is when an existing shared owner decides to move on and sells their home without ‘staircasing’ (buying the remainder of the property).
If you’re looking into shared ownership and think the scheme might work for you but you can’t find any new developments you like, you might want to look out for Shared Ownership Resales.
If you’ve already been looking at shared ownership properties available in your area, but you haven’t found anything in the right place – or if you’ve been unsuccessful in securing a home on a development you particularly like - Resales offer something different.
Shared Ownership vs Shared Ownership Resales
The main difference with Resales is that you will be buying an existing share which means you will only be able to purchase the same or larger share in the home as the existing owner. Then, just like Shared Ownership, you pay a reduced rent on the remaining share.
As an example, if the existing owner owns 50%, you can either buy that 50%, or make arrangements with the housing association to buy an additional percentage on top – but you wouldn’t be able to buy just 25%.
The other difference is that Resale homes vary greatly in terms of age, size and type compared to Shared Ownership homes which are new-build. This means Resales tend to be a little older and provide the chance to buy a home in a more established community.
Finding a Shared Ownership Resale
We ask all housing associations to list their resale properties on our website. You can search for a home in the area you wish to live on our property search page. However, as the process works in the same way as any other house sale, it’s also worth checking local estate agents, as well as the big property websites such as Rightmove and Zoopla to find the right property for you.
Once you have found a property you want to purchase, you will then apply in the same way you would for a Shared Ownership home, by completing our online application form.
What else do I need to know?
Unless you have a lump sum to buy your share outright, you’ll need to be able to secure a mortgage and for most people, checking this is available is the first step. With any Shared Ownership purchase, it’s important you get the right advice. We always recommend that you speak to an Independent Financial Advisor (IFA) who can explain your options and even work out the rental payments you’ll take on alongside any mortgage.
You can download our list of Shared Ownership IFA’s here.
It may also be a good idea to think ahead and work out when you’ll be looking to staircase and buy the next share. If you’re not sure how to get started, you can always call the Help to Buy NW team for a few pointers.
The eligibility criteria is the same as with other Shared Ownership properties, so make sure you meet the requirements – you’ll need to register and be approved by Help to Buy NW before you can go ahead with the sale.
Resale properties come available as and when the owner is looking to sell. They can be very popular, especially if they are part of a particularly sought-after site, so it might be worth getting your approval in place first. This only takes 4 working days and once you’ve been assessed as eligible for the scheme, your approval is valid for six months. This not only gives you time to look for the ideal place but it could also give you a head start once the dream resale opportunity does pop up!
What are my options after buying a Resale home?
Once you have bought the home you have the option to buy additional shares – known as 'Staircasing' – when you can afford to. If you increase your share in the property, your rent is re-calculated and reduced proportionately. You could eventually own 100% of the home if your lease allows you to. Some developments have a limit on staircasing so it’s always worth checking this before buying the home.
If you decide it’s time to move on you can always sell the home. The housing association you bought the home from may be able to nominate someone to purchase your home, but if not you are free to sell on the open market. But remember that the person who buys your home must meet the requirements for Shared Ownership and will need to go through the same process you did when you bought the home. Selling your Resale home will involve the same costs as selling any home, such as legal fees, so please bear this in mind.
So there you have it, our quick guide to Resales - we hope you found it useful.
For more of an insight into buying a Shared Ownership Resale you can read Rebecca’s story here or for further info please contact us on 0300 790 0570.