Lochaber Housing Association

Shared Ownership

INTRODUCTION

1.1     Lochaber Housing Association’s main aim is to provide affordable housing to meet the needs of local communities.  This is reflected in the Association's membership of the Highland Housing Register, which recognises the importance of identifying and meeting housing needs at a community level.  The same principle is continued for the sale and re-sale of Shared Ownership properties.  It will be operated in accordance with the core objectives and operating principles stated below.

1.2     The Association has a stock of shared ownership properties in Fort William, Caol and Ballachulish, Inverlochy and Achaphubuil, representing a small percentage of the Association’s overall housing stock. 

1.3     Grant subsidy for Shared Ownership development is only available in very limited circumstances and it is therefore unlikely that the Association will develop any new shared ownership homes.

1.4     The Association will therefore seek to maintain this stock as an affordable housing option: by facilitating the sale of shares between people wishing to move on, and people in housing need for whom Shared Ownership is an affordable option.

1.5     This policy does therefore not generally cover the allocation of new shared ownership properties, but the criteria and processes to be applied when shares change hands.

1.6     The Association will not actively seek to dispose of Shared Ownership units.  But in particular market circumstances, retaining a property may not be in the best interests of the Association.   This policy also set out the options that the Association may consider in exceptional circumstances

2.       CORE OBJECTIVES

(i)       To Improve the Affordable Housing Options Available to Meet Local Housing Needs

Lochaber Housing Association will provide Shared Ownership housing as part of a range of affordable home ownership options; to increase the available housing options for those with housing needs in Lochaber; and, to help sustain Lochaber’s many diverse communities.

  • To Make Best Use of Available Housing Stock

The Association will work alongside the Local Authority and other housing providers to ensure the best use is made of the housing stock in the Lochaber area.

  • To Provide a Cost Effective Service

The Association will always endeavour to ensure that shares in properties are marketed and sold on to suitable applicants as efficiently as market conditions will allow; and at best value to the Association and our customers.

 3.       OPERATING PRINCIPLES

3.1     Sales of a Sharing Owners Interest in a Property

  • When a sharing owner moves on from a property and wishes to sell their interest in the property, the Occupancy agreement provides for three options:
  • The Association can buy back the share and sell it on
  • The Association can join with the owner in a sale of the property in the open market
  • The Association can allow the sharing owner to sell the sharing owner’s share of the property on the open market, subject to such reasonable conditions as the Association may require.

In all but exceptional cases, the Association will adopt the third option.

  • The Association will not normally buy back shares in a property.   Our aim is to retain the property in our affordable housing portfolio if possible so that other people on low incomes can benefit from it. The Association will therefore encourage the sharing owner to market and sell their share of the property to a qualifying buyer, as outlined below.
  • The sharing owner should market the property and their share available for purchase on the open market.  The sharing owner is responsible for all their legal and marketing costs, and for obtaining a home report.
  • Prospective purchasers must initially be referred to the Association by the sharing owner to ensure that they meet the qualifying criteria.
  • The Association will not maintain a waiting list for shared ownership properties unless marketing new properties.  The Association will normally only keep an ad-hoc list of those known to be interested in the tenure, and will assist sharing owners by circulating marketing details to known interested applicants and other parties as appropriate.  Prospective purchasers will otherwise be referred direct to the sharing owner to arrange viewing.
  • The eligibility of potential purchasers will be assessed by the Association on a first come first served basis to replicate the realities of the market.  Providing essential qualifying criteria are met, no further personal needs assessment will be carried out, although financial checks will be made to ensure the applicant is likely to be able to sustain occupancy after purchase.
  • Applicants who do not meet the qualifying criteria to purchase will only be considered if no qualifying applicant applies, and in this case the sharing owner may opt for a joint open market sale with the Association.

3.2     Qualifying Applicants

  • A potential purchaser should generally be in one of the following groups:
  • First time buyers who would otherwise be unable to afford outright purchase of a property
  • Owner-occupiers who have had a change in circumstances which means they can no longer afford to sustain to move back to full owner occupation
  • Existing local authority or housing association or other public sector tenants
  • Applicants on the Highland Housing Register with unmet housing needs
  • Older people unable to purchase a property outright on the open market
  • People with special needs unable to purchase a property outright that is suitable for their needs
  • Serving members of the armed forces; or veterans who have left the forces within the last two years; or widows, widowers or other partners of service personnel killed in action during the last two years
  • Be aged 18 or over
  • Applicants must be able to demonstrate that they have sufficient financial resources to be able to meet all monthly housing costs (mortgage, occupancy charge and household bills); no legal restrictions to purchasing a properly; and to be able to afford to keep the property maintained and in good repair.  Affordability assessments and maximum income levels may be set by the Association where appropriate.  Where applied, details will be included in information to potential purchasers at application stage, and will be reviewed at least annually.

3.3     Approval of Sales

  • A request to sell an interest in a property or to enter into a joint open-market sale with the Association must be made in writing and signed by all joint owners where there are any.  The Association will not take any action until this is received.
  • If the Association wishes to buy the share back the sharing owner must be notified within 42 days.  The Association will inform the sharing owner in writing if they do not intend to purchase the property, and will invite the sharing owner to market their share to a potential purchaser.  The Association will otherwise have been deemed to have agreed to a joint open market sale.

iii)      The sharing owner will normally be responsible for meeting all marketing, legal and survey costs for the sale of their own share on the open market. 

iv)      In the exceptional circumstances where a joint open market sale is required (for example failure to achieve the sale of part share of the property in restricted market conditions), the Association will agree a marketing plan and notional budget with the sharing owner for joint open market sales.  Marketing costs will be split on a pro rata basis equivalent to the property share held by each party.  Each party will be responsible for their own legal costs.  The sharing owner must make sure that an up to date home report is produced at their own cost.

  • For sales of shares in a property other than joint open market sales, the sharing owner is responsible for marketing their share making sure that a home report is produced, and for all their legal and marketing costs.
  • If the sharing owner is selling on only their share of the property, the Association’s written permission must be obtained before the sale is completed.
  • If the prospective purchaser wishes to proceed they should agree a price with the seller, then apply to the Association so that their eligibility can be assessed before submitting a final offer and incurring legal costs.  A sale will not be approved for a purchaser who does not meet the shared ownership eligibility criteria.
  • Current staff, former staff, Board members and close relatives may apply to purchase an interest in a shared ownership property, but permission will only be granted where it complies with the regulatory guidance and best practice.
  • Formal offers to purchase a share from the Association, will be made and concluded through the Association’s solicitors.
  • Every sharing owner will also have a Deed of Conditions and an Occupancy Agreement, agreed and concluded through the Association’s solicitors

3.4     Failure to Secure a Sale

  • Where re-sale of an existing share can not be achieved within a reasonable period, the Association will generally join the sharing owner in a joint open market sale, with the proceeds being split according to the ownership ratio.
  • In exceptional circumstances, the Association may wish to consider other options.  These might include the following:
    • - Converting the tenure of the property to social rent
    • - Buy-back of the sharing owners share and onward transfer of ownership to LHA’s subsidiary company, Lochaber Housing Association Property Services (LHAPS) for conversion of the tenure to mid-market or market rent

Change of tenure at the property will only be considered after an appropriate options appraisal and a recommendation from the Head of Housing and Corporate Services; where an identified high housing need exists locally that matches the property profile, which is unlikely to be met through other resources; and with the prior approval of the Board and the Scottish Government.

 

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