These schemes are offered by registered housing associations and local authorities.
You will buy a “share” of the property and pay rent on the remaining share.
You can buy further shares in the property at the market value of those shares at the time of purchase. Buying further shares is referred to as “staircasing”.
As you buy further shares, the rent will be reduced proportionately to reflect the fact that the landlord’s interest in the property has reduced.
In most cases you will have the normal responsibilities of a full owner. This means, for example, that you as the leaseholder will be obliged to pay 100% of the outgoings relating to the property and keep the property in good and substantial repair and condition.
The lease also contains other “standard” obligations on you as owner. For example, you will still have to:
- Contribute towards the costs incurred by the landlord in providing services
- Need to seek the landlord’s consent before making certain alterations
- Comply with regulations relating to the management of the estate of which the property forms part.
Should you wish to sell or remortgage the property you will need the consent of your housing association to do so.
The above article is for guidance only and does not constitute legal advice. Relevant law applicable as at date of publication only.