Questions to ask

This guide takes you through:

• important questions to ask before you buy
• why you need to know this information

Your conveyancer (solicitor) will gather all the legal paperwork you need to buy the property. They will also send a number of questions to the housing provider about the property, known as “enquiries”.

You can ask your conveyancer to send any additional questions you have. This guide contains the kind of questions you will need to get answers to.

What you need to find out

• Are there any upcoming major works planned in the near future?
• Are there any defects or warranties related to the building that you should be aware of?

Why this matters

Upcoming major works may increase the amount of service charge you have to pay.

You need to understand details about the lease before you buy a shared ownership property.

There are different types of leases (known as “model leases”). Some can be extended by 990 years and others can only be extended by 90 years. The rules around buying more shares of a property (staircasing) are also different, depending on the lease model.

What you need to find out

• How many years are remaining on the lease?
• How many years can you extend the lease by?
• What are the costs involved in extending the lease?
• Do you have to staircase to 100% before you can extend the lease?

Length of the lease

A lease of 80 years or less can make a property difficult to sell and reduce its value. This is because a short lease is more expensive to extend.

Cost of lease extension

Extending a lease is expensive, often costing thousands of pounds. If your lease is 90 years or less, you will probably need to extend it during your shared ownership.

As a shared owner, you do not have a legal right to extend your lease until you have staircased to 100% ownership. Instead, you must follow an informal route through your housing provider.

Ask the housing provider (seller) if you can extend the lease informally. If you cannot extend the lease informally, you’ll need to work out whether you could afford to staircase to 100% before the lease drops to 80 years.

If the lease drops to 80 years, you’ll need to pay marriage value, in addition to the cost of the lease extension.

See our guidance on lease extension for more information.

You can buy more shares of a property (staircase), but the rules around buying more shares differ, depending on your housing provider and your lease.

What you need to find out

• How much can you buy at a time? (this will depend on your lease)
• Is there a limit to how much you can staircase?
• What costs are involved in staircasing?

Why this matters

• Some properties have a staircasing cap of 80%.
• Some housing providers only let you staircase a limited number of times during your shared ownership.
• Each time you staircase more than 1%, you need to pay for a valuation.
• If the value of your property has gone up, the cost of shares will go up too.
• You may need to remortgage your property if you staircase (to pay for a larger mortgage).
• You will need to pay Stamp Duty Land Tax on the property once you staircase to 80%.

What you need to find out

• How much does the service charge cost and what does it cover?
• Do you have to pay ground rent – and if so, how much is it?
• What administration charges do you have to pay as a shared owner?

Why the cost of the service charge matters

Shared owners have to pay service charges on 100% of the property, even if they only own a share of the property.

You might also have to contribute to a reserve or sinking fund to cover the cost of major maintenance or repairs to the building.

Service charges can be expensive and often increase over time. If the service charges are high, you need to think about whether you’ll be able to afford them when they increase. If they become very high, some lenders may not be willing to lend to you, when you remortgage.

Administration charges

Your housing provider may charge you a fee (administration charge) for certain requests, such as if you want to:

• remortgage your share
• sublet your property
• request documents (for example, when selling)
• carry out renovations
• keep a pet

Cladding is external panelling that is put on the outside of buildings. It can be made from different materials. Some types of cladding can be a fire risk.

What you need to find out

• Does the building have unsafe cladding?

Why this matters

If the building is under 11 metres tall and has unsafe cladding, you may be charged the cost of the work to make the building safe. (There are leaseholder protections for buildings over 11 metres.)

Properties with cladding on the building can be hard to resell. If the building is 11 metres or taller and you want to sell, you’ll need to get an EWS1 form from the housing provider – which can take time.

Some mortgage lenders (banks or building societies) will not offer you a mortgage if the property has unsafe cladding.

Find out more about fire safety for leasehold flats.

What you need to find out

• Do you need the housing provider’s permission to sublet?
• Do you need to pay a fee to sublet?
• Do you need to own 100% of the property (staircase to 100%) before you can sublet?

Why this matters

Subletting is not usually allowed for shared ownership properties.

Some shared owners need to sublet their properties – for example, if they need to move and are unable to sell the property. They would need to get permission from the housing provider.

Your housing provider controls the amount of rent you can charge a subletter. Some shared owners find this amount does not cover all the running costs of the property. This means they have to personally contribute, to subsidise their tenant.

Find out more: renting out your shared ownership property (subletting)

You must inform your housing provider if you want to sell the property.

If you own 100% of the property, you can sell it on the open market. But if you own less than 100% of the property, the housing provider will choose a buyer.

The housing provider has a set length of time to find a buyer. This is known as the “nomination period”.

​​Your lease might have a “first refusal” clause. This means you must offer your housing provider the chance to buy back the property from you, before you can sell it to anyone else.

What you need to find out

• Will you need to pay the housing provider’s legal fees if you decide to sell?
• What is the nomination period for the property (the period of time the housing provider has to find a buyer)?
• Is there a first refusal clause in the lease?

Why this matters

If the housing provider does not find a buyer within the nomination period, then you’ll be able to sell the property on the open market.

The nomination period is usually 4, 8 or 12 weeks. This means that if the housing provider does not find a buyer quickly, your sale could be delayed by weeks.

Find out more: selling your shared ownership property

There are many costs involved in buying a shared ownership property and different housing providers will charge you for different things.

What you need to find out

• What costs are involved in buying the property?

Why this matters

Most shared ownership buyers have to cover the cost of the housing provider’s legal fees, as well as their own. There are also other costs to pay, such as a reservation fee (of up to £500).

Ask the housing provider what other costs you’re expected to pay as part of the buying process.

Find out more: costs involved in shared ownership

When you buy a shared ownership property, the housing provider will become your landlord. It‘s important to know who is responsible for maintaining different parts of the property and who owns them.

What you need to find out

• What maintenance and repairs are the housing provider responsible for, both inside and outside of your property?
• What are you responsible for maintaining or repairing (as the shared owner)?
• Who owns the fixtures and fittings within the property, such as doors, taps, window frames and flooring?

Why this matters

Knowing these responsibilities will help you:

• understand who is responsible for which repairs
• understand how your service charges are calculated
• make sure you’re not being charged unfairly

See more information about who is responsible for what: understanding your shared ownership lease

Flats are often sold as leasehold properties. This means that the person buying the flat owns that unit, but does not own the building or the land that the building is on. The freeholder owns the building and the land.

Some shared ownership properties have 3 levels of ownership:

• a freeholder – owns the land and the building
• the landlord – leases the building from the freeholder
• a shared owner – leases the flat from the landlord

What you need to find out

• Does the housing provider (landlord) own the freehold, or is there a separate freeholder?
• Is there a management company involved?

Why this matters

If the landlord is not the freeholder, you will have no legal relationship with the freeholder.

This can cause problems such as:

• not being consulted about what service charges are spent on
• not being able to extend your lease if your landlord has a short lease with the freeholder – to extend your lease, your landlord must have a long enough lease
• having to pay ground rent because it’s mentioned in the head lease (lease between the freeholder and your landlord), even though there’s no mention of ground rent in your lease

If the freeholder is different from the landlord, make sure your conveyancer (solicitor) reviews the head lease, because it may contain clauses that are not in your own lease.