Streamlining the Resale of Shared Ownership Properties
When the Chancellor released his Autumn 2014 statement, he promised to make the re-sale of shared ownership properties more efficient for all parties.
Following a consultation carried in January 2015, the Department for Communities and Local Government (“DCLG”) and the Homes and Communities Agency (“HCA”) released their proposals to streamline the process of selling on shared ownership properties and encourage the market for second-hand shared ownership homes.
Summary of Proposals – Effective April 2015
- Model leases and guidance to be amended to remove pre-emption right following 100% staircasing
- Amend guidance to recommend providers remove the pre-emption right following 100% staircasing of existing shared ownership leases
- Government to undertake a review of shared ownership focusing on possible longer term options for change – due Summer 2015
make shared ownership properties quicker and easier to sell, but if the process is successful, will this encourage or discourage the purchase of shared ownership properties in the future? If there are so many owners looking to sell, will this mean this will discourage potential buyers from wanting to own a share in the properties?
A great part of the decision to revise this is because of the pre-emption rights – the debate being are they necessary? Research has shown a great number of housing associations do not use pre-emption rights, and at the moment this is being seen to be a main complication to the whole process.
The process also seems to be complicated by a lengthy process in which the seller must write to the housing provider to assign the lease, and the seller must wait a further 8 weeks for the housing provider to decide to nominate another purchaser or itself to acquire the interest in the lease before the house is put on the open market, which should discourage a large percentage of the owners from selling, which in turn, will affect the amount of potential buyers purchasing shared ownership property.
Every seller would prefer a clean, simple transaction, and there should be no exception when it comes to selling shared ownership property and time is most definitely an issue – the eight week nomination period in which the housing provider must decide to nominate another purchaser or itself, should be cut down to four weeks, as more of an incentive for the interest that people will be having in shared ownership properties.