This information is for:
Adactus Housing Association, Beech Housing Association, Chorley Community Housing, Miles Platting

What is Leasehold?

The property is owned by a person by way of a lease agreement between the leaseholder and the owner of the land/building (freeholder). The lease permits them to own/occupy the property for the duration of the lease (normally 99 or 125 years). The leaseholder pays to buy the lease from the freeholder or a previous leaseholder. It differs from freehold ownership because they only have the right to occupy the property for a fixed time and the property is returnable after the expiry of the period.

What is Shared Ownership?

Shared Ownership is a popular part-buy, part-rent scheme that allows you to buy a share in a new home, ranging from 25% to 75%, depending on what you can afford. It’s backed by the government, and it aims to assist people who can’t afford to buy a home with a commercially available mortgage. A housing association owns the remaining share, and you pay a reduced rent on that share. This means that you need to get a smaller mortgage to buy the property, and will also need a smaller deposit.

You can buy more shares or buy your home outright whenever you can afford to, this is called staircasing, and as you buy more shares, you will pay less rent. In some instances you may have to live in your home for a year before you can buy more shares and in rural areas staircasing can sometimes be restricted.

You can browse the latest properties available for shared ownership on theSnugg Homes website. Snugg Living is the shared ownership specialist for members of the Jigsaw Homes Group.

Rights & Responsibilities

The rights and responsibilities of the leaseholder are set out more specifically in their lease and all leaseholders should go through the lease with their solicitor before buying the property, to ensure that they fully understand it. As each lease is different depending on the property, the rights and responsibilities are usually slightly different too. Some things are always the landlord's responsibility, for example providing buildings insurance. This is then charged to tenants through their service charge. Tenants must ensure they have contents insurance as they are responsible for all maintenance inside the property.

Leaseholders should receive their copy of the lease from their solicitor when they buy the property. If this has been lost we can provide a replacement copy but there is a charge of £25 + VAT to cover our administration costs.

Selling a Leasehold Property

There is a procedure to follow when selling a leasehold property. Leaseholders who are thinking of selling their property should contact the leasehold team as soon as possible to ensure the sale complies with the lease. If we are not contacted initially it may case problems later or delay the sale and cost the leaseholder money.

Staircasing

This is the term for buying extra shares of a shared ownership property. Almost all shared owners are eligible to staircase to at least 70% however it is specified in their lease whether they can staircase completely (100%) or just to a certain percentage. Many retirement properties or properties in rural areas do not allow staircasing to 100%.

Any enquiries about staircasing should be sent to the leasehold team.

When a request is received will double check the lease and rent account to ensure the shared owner is eligible. Eligible shared owners will be sent our staircasing application form. If there are arrears, the shared owner will be asked to pay these off before the application is processed.

The application will take approximately 6 - 8 weeks to approve as long as all the information needed is sent with the application form. The shared owner will have to pay for a valuation from a RICS qualified surveyor (not an estate agent) and pay their legal costs.

What are the benefits of staircasing?

Most people aspire to own their own property and you made the step towards this when you bought your home on a part buy/part rent basis.

Buying a greater proportion of your home has a number of benefits:

• You reduce the amount of rent you are paying to Adactus.

• When you decide to sell your home, the greater percentage you own, the more profit you will make if the value of your home has increased.

• If you can own your property outright you can sell your property on the open market using an estate agent of your choice and you can sell your home to anyone interested in buying your home (and not restricted to those who meet the criteria within the lease).

• You can maximise the profit from any major improvements you have made to your home. 

Flexible Tenure

This is also called downward staircasing and is when we buy back some, or all, of a shared owners shares in their property. It is only available as a last resort to shared owners who are in severe financial difficulty.

If leaseholders are facing financial difficulty, particularly if they are struggling to pay the mortgage or rent, we strongly recommend they seek professional advice before the situation worsens and their home is put at risk. Our money advisors can assist with money/debt problems or offer help applying for benefits.

Flexible tenure cannot be used to pay off credit cards or any other debt. It will simply pay off some, or all, of the mortgage. Shared owners do not have a right to flexible tenure and it is offered purely at our discretion.

Please contact the leasehold team for further information and an application form.

Maintenance and Improvements

Maintenance and repairing responsibilities for leaseholders are set out in the lease. In most cases leaseholders in flats are responsible for everything inside the flat but we will be responsible for the external structure of the building and any common areas. The costs of this work are then recovered through the service charge. Shared owners living in houses are normally responsible for repairing and maintenaining their home.

All leaseholders must ask for our consent before they can make any alterations or improvements to their home. This does not include redecoration but would include bathrooms, kitchens, windows etc. There is an administration charge for consent. The leasehold team can give further information about this.

Subletting

Shared owners are not normally allowed to sublet. This is because shared ownership schemes are government funded and we have to ensure this funding is not abused to make a profit. There are some exceptional circumstances when we may allow shared owners to sublet. The leasehold team can give more information on this.

Some other leases also have restrictions on subletting. When considering subletting leaseholders should always contact the leasehold team to confirm what their lease requires. If you are subletting your home we will require a copy of the tenancy agreement you will be using and contact details in the UK for you or someone authorised to act on your behalf.

Lease Extensions

Leaseholders who own 100% of their property normally have the right to a lease extension. To apply for a lease extension leaseholders need to find a solicitor to act on their behalf. We are not able to give you any advice about prices and leaseholders will probably need to arrange a professional valuation. A solicitor will be able to advise about this further.

Shared owners do not have the right to a lease extension but we will normally agree an extension where the lease is so short that it would affect the ability to mortgage the property. Contact the leasehold team for further information.