ARTICLES

Feb 2024

By Lucy Owen, Director & Head of Resales

As seen in the Feb/Mar 2024 edition of the First Time Buyer Magazine

Resales and Staircasing are often the forgotten genres of the shared ownership market but perhaps this is due to lack of focus on marketing, or leaseholders not knowing where to start. Hopefully this article will pique the interest of some Buyers interested in either a resale property or Staircasing.

Resales

So, what is a resale property? This is a property where a shared ownership lease has already been granted and the current leaseholder is looking to sell their share. Effectively, New Build Shared Ownership properties become resales after the first owner sells and then every time the share is sold afterwards.

The beauty of resales is that they come in all shapes and sizes due to different schemes that have been in place over the years - Not only are there relatively new properties, but also older properties with their own sense of character. Not everyone wants a new build, and this is where resales really come into their own - flats, houses of all shapes and sizes, maisonettes, coach houses, etc.

Practically speaking, conveyancing of resale properties is similar to open market conveyancing, with the extra addition of Housing Association involvement. With resale properties, each set of draft Contract papers are individual to the property and therefore must be considered individually.

In addition, Management packs must be obtained, alongside searches, and this can sometimes take a few weeks to issue. This means that a resale transaction can take 12-14 weeks from the date the draft Contract package is received, if there are no unexpected issues. In addition, there may be a chain involved as the owner of the shared ownership property may be buying another shared ownership property, or they are buying on the open market.

With buying a resale, there is also the benefit that you are buying a property that already exists. This sounds daft I know but often new builds are sold off plan (they haven’t been built yet). The bonus with resale properties is that you get to view them in person, and you get a feel for the area and the community. If you live locally, you may even know someone who lives nearby - always good for an emergency cup of sugar… or glass of emergency prosecco - depending on your definition of emergency!

Staircasing

Staircasing is where a leaseholder of a Shared Ownership property purchases further shares from the Housing Association, who owns the remaining part. The bigger the share the leaseholder owns, the less rent is proportionately payable.

You may be aware of the new changes regarding staircasing because of the recent consultation which will now allow a shared ownership leaseholder to staircase in increments of 1%. However, this will take a little while to filter through as this only applies to shared ownership properties delivered through the Home Grant programme 2021-2026. Any existing shared ownership Leases will not benefit from this new approach.

The shared ownership leaseholder can buy in minimum tranches (which is normally stipulated in the lease), however as there are valuation and legal fees to pay, a Leaseholder would be well advised to buy the largest share they can afford at the time of Staircasing, and some Housing Associations require final staircasing to occur in no more than 3 attempts of staircasing (as they also have to pay their own legal fees). 

Once final staircasing is achieved the property is effectively no longer shared ownership, it’s owned outright, and the Housing Association (generally speaking) no longer has any involvement.

Owen Paulo specifically specialises in Resales and Staircasing and are happy to advise on the above. Please email enquiries@owenpaulo.co.uk or call us on 0808 196 7020 to obtain a quote, or advice.

Alternatively click on 'Get a Quote' at the top of the page.