All I want for Christmas is…my own front door
Kathryn Hill explains the options for buying or renting an affordable home.
Social Housing, Affordable Housing, Shared Ownership, Staircasing… confused?
Social or affordable housing aims to enable people on low incomes to own or rent an affordable home. It can offer an alternative model of home renting/ownership to the traditional “council houses” that were more prevalent in years gone by.
Social Landlords or “Registered Providers” manage social housing. They are often Housing Associations or Local Authorities.
Social Landlords aren’t in it for the money. They are not-for-profit and are kept busy repairing, upgrading and maintaining their existing social housing stock. They also help finance the building of new homes, either through building their own or buying houses at affordable rates from developers who are building sparkling new estates.
Shared Ownership Leases are often offered by Social Landlords as a means of allowing people to buy a “share” of a home. Typically, individuals buy a share that is between 25% to 75%, and pay rent on the remaining percentage. This is so that people get to buy their own home, put their stamp on it and generally “invest” in living there… isn’t that what everyone would want for Christmas?
A buyer (Mrs P) spots the perfect new house for her growing family on a Social Landlord’s website.
She meets the criteria of a person in housing need. The new home is being offered for sale at £60,000.00 for a 50% share, via a Shared Ownership Lease.
The buyer has a small deposit and has obtained a mortgage to buy the remainder of the 50% share. Mrs P moves in, pays a mortgage on her share and pays rent on the Social Landlord’s 50% share of the new home.
Owning a larger share though ‘staircasing’
She has done her research and knows she has the option of buying a further part of the Landlord’s share, known as “Staircasing”.
The property is valued by a Surveyor and a price for the Social Landlord’s 50% share is calculated on the basis of that valuation.
Mrs P obtains a mortgage for the additional 50% share and buys the Social Landlord out. She is now the “full” owner of her home (subject, of course, to the two mortgages).
If you are buying an affordable or low cost home and would like any advice, please contact Kathryn Hill, Senior Associate in the Residential Property Department on 01900 510366 or at firstname.lastname@example.org.
About the author
Published: Tuesday 19th December 2017
Categorised: Commercial Client, Private Client, Buy to Lets, Commercial Property, Residential Conveyancing, Living Together, Legal Services in Newcastle, Penrith, West Cumbria