Help to buy, shared ownership schemes and staircasing

Thursday, 20th December 2018
Valuation | Surveying

With house prices in some areas of London having risen 10-fold over the last 20 years it is becoming increasingly more difficult for young people to get their foot on the property ladder. Initiatives that have increased in popularity since they were first introduced in 2013 are the Help to Buy and Shared Ownership schemes.

The Help to Buy scheme allows owners to purchase a property with a 5% deposit, 55% mortgage and 40% Government loan (this is reduced to 20% Government loan outside of London). The property must be; a new build, have a purchase price of no more than £600,000, be the only one you own and not be for investment purposes.

The benefits of this include a much lower deposit, with no interest to be charged on the Government loan for the first five years. If the load has not been re-paid after 5 years a fee of 1.75% will apply the following year – the percentage fee rises annually by the retail prices index (RPI) plus 1%. The idea of the fees is that they encourage you to repay the loan before they are triggered.

The Shared Ownership scheme allows a potential buyer to purchase between 25%-75% of a property and the local housing association or registered provider to purchase the remaining shares of the property. The result is that you effectively ‘part own and part rent’ the property. To be eligible for the scheme; the household must earn less than £80,000, be a first-time buyer or not be able to afford a new home or be an existing shared owner. Your name must not be listed on the deeds of another property.

The advantages include the ability to buy the type of property you want a lot sooner than at normal market value and with a much smaller deposit. The rent is normally less than on the open rental market and you have security of tenure. An ‘Older people’s shared ownership’ scheme is also available for owners over 55 years old.

The disadvantages are rent is still payable to the landlord and the owner is treated like a tenant having to pay maintenance and service charges. If you fail to pay your rent you can be evicted much like under a regular Assured Shorthold Tenancy.

In practice these schemes allow first time buyers to purchase a property when they wouldn’t, under usual circumstances, have the ability to do so.

How can we help?

‘Staircasing’ is the process of buying more shares in the property from the local housing association or registered provider. To do this, a Red Book Valuation will need to be undertaken by an RICS Registered Valuer to determine the market value allowing the tenant to then purchase more shares. There are strict guidelines regarding how the valuation is undertaken.

As part of the valuation the surveyor undertakes a visual internal and external inspection and confirms the floor area. External factors that are considered include the type, construction and condition of the chimney stacks, roofs, rainwater goods, walls, damp proof course, sub-floor ventilation and external joinery. Internally the type, construction and condition of the ceiling, walls, chimney breasts, floors, dampness, timber defects, kitchen, bathroom, services and outbuildings are all taken into account. The location and character of the area are also hugely important to the valuation.

Once the inspection has been undertaken comparables are sourced through local estate agents and online databases. The best comparables are those which have been sold most recently and are most similar to the subject property. Comparables are adjusted to allow for differences in size, condition, location etc. as part of the process of arriving at a final figure

If you are considering purchasing a further share of your property and require a valuation we’d be happy to provide some additional advice and a fee proposal. Please contact us on 020 7183 2578 or by email.

Excellent firm for party wall surveys. After a bit of sleuthing I chose Peter Barry as they have a good reputation for avoiding the kind of conflicts that can escalate fees needlessly. That certainly proved true of my very level-headed and helpful surveyor James Merewether. Highly recommended.
Shaun Blake who was my surveyor was professional, friendly and knowledgeable. He took time to examine my property and produce a very detailed and informative report. I will definitely use 'Peter Barry ' in future and will have no problem recommending the company to others.
Had a Level 2 survey carried out recently, excellent service, clear and concise report delivered on time. Great service from start to finish from our first point contact Joanne to the surveyor Justin. Happily recommend.
Response from the owner:Thank you for your kind words and recommendation. We're delighted to hear you received excellent service from Joanne and Justin, and that the report met your expectations. We appreciate your feedback and look forward to assisting you again in the future.
Fantastic company, very professional and provided an excellent service for my help to buy property valuation.
Response from the owner:Thank you for your review. We're delighted to hear you found our service professional and helpful for your property valuation. We look forward to assisting you again in the future.
Excellent service!

We booked a survey with Peter Barry Surveyors for the purchase of a home. Maianh was very quick to respond to our initial email and all follow up conversations. They also set us up with a pre-survey phone call with David Breeze (surveyor) who took the time to explain how the survey is conducted. They arranged access to the property directly with the realtor, and we received the report 4 working days later, after which we had another call with David to discuss the report and explained to us what the next steps were. We are now in the process of conducting the specialist surveys (with other companies) as per their recommendation.

Very helpful, very friendly, and professional.
Response from the owner:Thank you very much for your excellent review! We are delighted that you found our team to be helpful, friendly, and professional throughout the process, and I will certainly share your comments with Maianh and David. Thank you for choosing Peter Barry Surveyors!
I received an excellent service, with great communication, this company is fantasic, very helpful and highly recommended.
Response from the owner:Thank you for your recommendation.
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