Decoding Shared Ownership Jargon: A Beginner’s Glossary

Shared ownership offers an accessible pathway to home ownership, but navigating its terminology can sometimes feel like deciphering a foreign language. Fear not! In this beginner’s guide, we’ll demystify the jargon, providing a clear roadmap to understanding the shared ownership landscape.

Agreement in Principle (AIP): Also known as a ‘Decision in Principle’ or a ‘Mortgage in Principle’, an Agreement in Principle is confirmation from a mortgage lender that they will lend you money as part of a mortgage towards a property.

Conveyancing: Conveyancing is all the legal work that needs to be done when buying your new home. You will pay a conveyancing solicitor to do this on your behalf.

Deposit: the amount of cash you pay upfront to purchase a home. This can be a percentage of the mortgage or share that you purchase. This does vary from lender to lender but usually starts from 5% of the property purchase price.

Eligibility Criteria: Requirements set by housing associations or developers regarding income, residency, and other factors to qualify for shared ownership.

Equity: Your share of ownership in the property, is calculated by subtracting the amount you owe on the mortgage from the property’s market value.

Housing Association: Love Living Homes is the trading arm of Town and Country Housing, which is a Housing Association (HA). Working closely with District Councils, HA’s offer social homes, Shared Ownership homes, market rentals, flexi-buy homes, and essential supported / specialist housing.

Independent Financial Advisor (IFA): An Independent Financial Adviser (IFA) provides specialist advice on how to manage your money.

Shared Ownership: A housing scheme where you buy a share of a property and pay rent on the remaining share to a housing association or developer.

Leasehold: The legal agreement giving you the right to live in the property for a set period, usually between 99 to 999 years.

Mortgage: A loan used to purchase a property, with repayments typically consisting of both principal and interest. A mortgage cannot be used for decoration or debt consolidation.

Nomination Agreement: Sometimes district councils only allow those with a local connection to apply for Shared Ownership homes. We start to market new developments up to 6 months before we expect to release them to the market. This allows us to build up a database and ensure buyers have time to register their interest.

During this time, we are also collating all the information we require to sell the homes, such as nomination agreements, conveyance plans, specifications, technical information, leases, and contracts and all the legal information, without which we cannot sell the homes. We will update all our marketing outlets as more information becomes available.

Resale: The process of selling your shared ownership property to another buyer, often facilitated by the housing association to ensure compliance with regulations.

Service Charge: A fee paid by shared owners to cover the costs of maintaining communal areas and services within the property development.

Stamp Duty: Stamp Duty is the tax that buyers need to pay when purchasing a property. It does not apply to first-time buyers.

Staircasing: The process of buying additional shares in your property, gradually increasing your ownership percentage, and reducing the amount of rent paid.

Valuation: An assessment of the property’s market worth, crucial for determining the price of additional shares during staircasing or when selling the property.

Navigating the shared ownership journey becomes much simpler when armed with a basic understanding of its terminology. By decoding the jargon, you empower yourself to make informed decisions and embark on your homeownership journey with confidence.

Ready to take the first step towards owning your dream home? Reach out to us at Love Living Homes to learn more about shared ownership opportunities in the Kent area.

Stay tuned for more insights and tips from Love Living Homes as we continue to guide you through the exciting world of homeownership!