Selling a Shared ownership (part rent-part buy) property?
Shared Ownership homes are usually provided by housing associations. If you want to sell, you should go directly to the housing association to whom you pay your service fee to. They will tell you the process for selling your home.
Selling a discounted sale or local needs home
Your discounted sale, equity share or local needs home will usually be subject to a Section 106 planning obligation. This is a legal agreement which specifies who would qualify to buy your home, and at what price. In the case of local needs homes there may not be a price restriction, however, you will still need to sell to eligible households. You should check your Section 106 agreement so that you are aware of any specific requirements relating to your home.
Cornwall Council will be asked for our written authorities by the solicitors acting in the sale. It is essential that we are involved from the outset. Failure to involve the Council in proceedings may result in delays to the sale process.
The role of Cornwall Council Affordable Homeownership Service
We need to ensure that you sell your home in accordance with the terms of your s106 agreement.
we will:
- act as the first point of contact for owners looking to sell their affordable home
- collate the necessary information from you. This will allow the Council to calculate the maximum sale price for your affordable home
- agree an advertising scheme for your home. This will include the requirement for you to advertise on a premium property website such as Rightmove or Zoopla. Our preference is for you to use a local estate agents to assist with this.
- qualify applicants interested in buying your home. Depending on the requirements of your s106 agreement this may include assessing their:
- local connection
- housing need including ability to buy on the open market
- financial assessment
Details of your affordable home for sales notice
So that Cornwall Council have full details of your home you will need to complete a Sales Notice.
Confirming the maximum sale price
You will need to provide Cornwall Council with evidence of the current open market value of your home and the resale percentage. This is so that the Council can confirm the maximum price at which you can sell your home.
Open market valuation
You will need to submit a report of the open market value of your home. This must be:
- undertaken by a Royal Institute of Chartered Surveyors (RICS) surveyor
- in accordance with the latest RICS valuation standards and
- dated no earlier than 3 months before the submission of your sales notice
Resale percentage
Evidence of this is usually:
- in your Section 106 agreement
- in TP1 transfer document from the Land Registry or
- available from the developer of your property
If this is a first resale on an older development you may need to provide evidence of:
- the initial open market value and
- the restricted price you paid
- This is in order to work out the resale %.
Local needs homes
Some homes may not have a price restriction.
These are homes which are subject to older s106 agreements (or the predecessor s52 agreements). These must still be sold to eligible households. These are known as local needs homes.
The occupancy criteria in the s106 agreement normally have a depressing effect on the value. If you own a local needs home it is therefore important that you make the estate agent you are using aware of the occupancy terms. They can then take these into account in their valuation. You need to confirm the price at which you are looking to sell your home in the scheme type section of the Sales Notice.
Section 106 agreement
You need to provide Cornwall Council with a copy of the s106 agreement relating to your home. Usually this will have been provided to you when you initially purchased the property. If you don’t have a copy you will need to obtain it from your solicitors or upon request from the Council. There is a charge for this service which can be requested by emailing planning@cornwall.gov.uk.
Equity share
Do you have an equity share (mortgage) arrangement with the original developer? If so, it is essential that you provide Cornwall Council with evidence of this and the share you hold. This is to ensure that purchasers and their lenders are clear about what they are purchasing. It will also ensure that the discounted price is accurately calculated by the Council. Please provide Cornwall Council with a copy of the equity share (mortgage) agreement you entered into. This will be a formal legal document. If you don’t have a copy you will need to ask the original developer or your solicitor who dealt with your purchase. The Council will not be able to confirm a sale price until you provide evidence of your share value.
The Council have become aware that there are currently no lenders who will mortgage private shared equity schemes where a second charge (mortgage) is held with the original developer, usually Wainhomes. The Council and Wainhomes have agreed a joint approach to convert any affected properties to Discounted Market Sale and discharge the equity loan to help you sell your property. A new s.106 agreement may be required if your current s.106 does not contain the necessary clauses and the Council and Wainhomes’ legal fees will need to be paid by the owner. If you are looking to sell your shared equity property then we advise you to seek your own independent legal and financial advice and allow extra time to sell your property to allow for the legal work to be undertaken.
If you do not reveal the existence of an equity loan you could be liable for abortive mortgage application costs incurred by a purchaser. If you are not sure if your property is subject to an equity loan you can download a copy of the register of title for your property. This can be downloaded from the land registry documents website for a small fee.
Advertising your affordable home
Advertising is key to ensuring that as many local purchasers as possible are aware that your affordable home is available for sale. Normally, your s106 agreement will require you to agree an advertising scheme with the Council. We will require you as a minimum to take out an advert on a premium property website such as Rightmove or Zoopla. Appointing a local Estate Agent is highly recommended. They will have the knowledge to enable the widest possible advertising in the local area.
Purchasers must be given information about the energy performance of your property right from the very outset. You should therefore ensure that an energy assessment is carried out as soon as your property is marketed. The Energy Performance Certificate should be submitted to your appointed Estate Agent.
Costs and Fees
You will have to pay a surveyor for an open market valuation of your home. You will also need to find a solicitor and pay the usual legal fees associated with selling your home. You will have to pay for advertising fees through an agent or online advertising.
Ready to sell?
You must submit all the following information in order for Cornwall Council to process your request to sell your home:
- Completed Sales Notice
- a report of the open market value of your home undertaken by a RICS Registered Valuer
- The s106 agreement relating to your home
- Evidence of the discount applicable
- Evidence of the equity share arrangement if applicable
Email all of the documents to: affordablehomeownership@cornwall.gov.uk
What happens next?
Advertising of your property can only begin once:
- Cornwall Council have received all the relevant documents from you
- the advertising proposal and sales price have been agreed by the Council
Any further questions?
If you have any questions please contact the Affordable Homeownership Service using the details on this page.
