Reader Question:
Can I create a shared ownership to help sell my property?
My Answer:
A shared ownership is where a purchaser owns only part of their property (typically 75%) and the remainder of the property is owned by a third party, typically a housing association or builder. The owner of the owner of the property pays rent to the third party for the part of the property they do not own. When the property is sold the owner will retain only the proportion of the sale proceeds based on their share of ownership.
In theory there is nothing to stop an individual setting up a shared ownership arrangement with the legal aspects being arranged by a solicitor. In practice, however, it might be difficult to sell an individual property with a shared ownership arrangement in place, as this could be seen by a buyer as an unusual arrangement and may put them off the purchase.
The other issue you could encounter is that if the person buying your property required a mortgage then the lender would require them to put down a deposit on their 75% of the property, probably 10%+. This is assuming that a lender would agree to the mortgage with a shared ownership arrangement in place.
I guess the question in my mind is why would you want to do this?
I could, maybe, understand a parent making this type of arrangement to help their offspring to get on the housing ladder. If, however, you want to sell it because your property is not selling, then I would look into the reasons why the property is not selling - price, condition etc. before i would go down the shared ownership route.
I hope that helps
Liam
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