A guide to being a Shared Owner
We’ve produced a guide for shared owners or those thinking about becoming a shared owner of Weaver Vale Housing Trust Limited (“the Trust”). It describes some of the important responsibilities and commitments associated with being a shared owner with the Trust (please note that Prospa Homes is the brand name we use for our shared ownership activities).
This handbook is for guidance only, it is not a legal document and does not replace your lease which sets out the rights and responsibilities of both parties in full and should be your first point of reference should you have any queries.
We’ve selected some of the information from the guide, as shown below, we hope you find it useful and please contact us with any questions. You can read the guide in full here.
The Shared Ownership Lease
The lease is the legal document entered into by you and the Trust (in this document referred to as “we”/”us”) that sets out the rights and responsibilities of both parties. The lease provides you with long term ownership of your home. Normally it will be for a minimum term of 990 years.
Normally, but not always, we own the freehold of the land on which your home is built. If we do own the freehold, we can transfer it to you if you purchase 100% of the shares in your home (please note this is subject to the terms of your lease and would not apply to apartments. Please contact us if you require more information).
When buying your home, you will have had the chance to read your lease before signing it and your solicitor should have explained the terms of the lease and the responsibilities you were taking on.
Rent & Service Charge
How is the rent calculated?
The rent is the amount you need to pay on the share of your home which remains in our ownership. So, for example, if you have bought a 40% share, you would pay rent on the remaining 60%. The rent you pay helps us finance the development of the property. Although you pay rent you have different rights, responsibilities and commitments as a shared owner than you would do if you were a general needs tenant of the Trust.
How and when does it increase?
How and when your rent will increase is explained in the lease. Typically, your rent will increase on the 1st of April each year. The rent increase is normally based on the Retail Price Index (RPI) + 0.5%. The RPI figure used is based on the September published figure, unless the lease states otherwise. You can find more details about the Retail Price Index on the website of the Office for National Statistics
About your rent
Rents will vary depending on the amount you own. Rent is calculated at 2.75% a year of the value of the share you don’t own at the time you buy. This means if you ever want to purchase 100% you won’t pay rent any more.
Rent and service charges are due monthly in advance on the first of each month. Your rent should be paid by direct debit. If you’ve not set up a Direct Debit to pay your rent and service charge, let us know and we can send you the relevant form to complete. Please refer to the guide for further details.
Unlike the unpredictability of renting privately, shared ownership rents will only increase at inflation +0.5% each year. Whether you’re a first-time buyer living with your parents, a tenant tired of renting while struggling to save for a deposit, or a former home owner who has sold/is selling their home, or you’ve had a change in circumstance such as divorce…. shared ownership could be for you.
Buying more shares (known as staircasing)
When can I staircase?
You can buy a greater share in your home whenever you can afford to and want to, including up to 100% on most of our shared ownership homes. If you do not want to buy a larger share, then you do not have to; you can just retain your original share.
How do I staircase / buy a greater share?
There are two ways of doing this;
1. For the first 15 years following your purchase you will have the option to buy 1% each year. The price of each 1% share will be based on an estimated valuation linked to the original purchase price, adjusted each year upwards or downwards in line with local House Price Inflation. We will provide you with an updated valuation at least once per year and at any other point that you request to purchase an additional 1% share. We will not charge administration fees on shares bought as part of this gradual staircasing model, however, you will be responsible for your own legal fees if you choose to get legal advice/representation.
2. Shared owners wishing to buy more of their home can do so at any time by purchasing 5% or more at the prevailing market value as assessed by an independent RICS registered surveyor who must have no interest in the further sale of the property. You will be expected to pay for the valuation along with any legal and mortgage fees. You will also need to consider whether stamp duty applies to this transaction.
For more details about being a Shared Owner including
- Insurance and property maintenance
- Reverse or downward staircasing
- When change happens
- Changes in the housing market
- Living in your home
- & more!
Download the full guide here
- Terms and conditions apply
- Please obtain independent legal and financial advice before purchasing.
- If you don’t keep up rent and/or mortgage payments you may lose your home.
- Please note all details correct at time of publication and are subject to change.