If you decide that you want to increase the size of your share, you are able to buy in blocks of 25%. Therefore, if you initially purchased a 50% share, you can either buy a further 25% to bring your ownership up to 75%, or you could go for full ownership by buying the other 50% at once.
For some properties (subject to the terms within your lease), purchased under the New Build HomeBuy Scheme, the remaining shares will need to be purchased in the maximum of two blocks, the minimum amount of shares being 10%. For example, if you initially purchased a 40% share, you can buy an additional share of 10% which will bring your ownership up to 50%, then you could purchase the final 50% for full ownership.
Whichever option you choose, your rent will be reduced proportionately, or in the case of full ownership, rent will no longer be payable.
What are the advantages?
- Once you get full ownership (100%) you will no longer be required to pay rent
- If you are buying a house the freehold will automatically pass to you at this stage
- In the case of flats you will acquire the Head Lease
Who is eligible?
Naturally, your ability to staircase will be subject to you being in a position to finance the purchase and it is likely you will need a further mortgage advance. Should this be the case, it is important that you check with your lender that you are able to get this.
Qualifying period
You normally have to be a shared owner for a minimum of 12 months before you can apply to purchase additional shares. However, if your lease has been assigned (i.e. ownership was transferred to you from another shared owner) you will normally have to wait only three months before applying.
Valuation
An Independent valuation is required to determine the open market value of the property and the purchase price of our share. This must be carried out by an independent valuer (member of the Royal Institute of Chartered Surveyors), in order to ensure impartiality and fairness. You can choose a surveyor from our panel or nominate a suitably qualified independent surveyor. The valuation is usually valid for three months after which time a replacement may be required. You will be responsible for the cost of the valuation (and any subsequent valuations). You should expect to pay a fee of approximately £100 plus VAT. It is important that you try to complete the purchase within the first three months to save additional expenses.
Informing us
You must inform us in writing of your intention to purchase additional shares in your home. Please note we can only act when we have received your written instructions.
Disrepair
It is a condition of your lease to keep your property in good repair and the valuer is instructed to note any defects to your property. When Mercian calculates the purchase price of the remaining share it will be at the value as if your property had been in good order.
Improvements
If you have made improvements to your property which affect the value, this will be disregarded when the Association calculates the price of its share.
What happens next?
Once you have decided to proceed with the sale you will need to appoint a solicitor. Your solicitor will then need to write to us confirming they are acting for you in this matter and you have funds available to purchase the additional shares in your home. Once we are in receipt of your solicitors letter we will instruct our solicitor to proceed with the sale.
You will also be expected to pay the costs of the preparation of the document which transfers the ownership of the additional shares to you, the cost of which is approximately £50.00 plus VAT. This amount will be due from you on completion, through your solicitor.
Solicitors
Once the matter is in the hands of your solicitor, they should keep you informed of progress throughout the purchase.
Your Rent Account and Service Charge Account
Your accounts must be clear on the day of completion to prevent the sale being delayed. If you pay by direct debit or standing order please do not cancel this until completion has taken place. We will arrange to refund you with any balance on completion.
If you pay a service charge to Mercian or any other management company you will continue to pay this if you purchase additional shares.
If you would prefer to sell the share you own in the property, there is more information about how to do this. Please read Selling Your Home.