Leasehold and home ownership
The purpose of this section is to give Leaseholders and Home Owners an insight into some of the services you can expect to receive from us. These services may vary depending on your lease and the scheme. If you have any queries, please contact the Leasehold Team at leasehold@castlesandcoasts.co.uk.
Leasehold Handbook
Please click on the link below for our Leasehold Handbook, full of helpful information for you.
What do I need to do if I wish to sell my property?
The structure of leases varies quite a lot from scheme to scheme depending on when the scheme was originally built, however there are two main types of lease:
The lease is assigned on sale with the un-expired period passing to the new owner. For example, the owner of a 99-year lease transfers the lease after five years to a new buyer, who then acquires the remaining 94 years. Most shared ownership leases are of this type.
The owner of the lease surrenders the remaining years back to the Landlord, who then re-grants a new lease to a new purchaser. For example, the owner of a 99-year lease transfers the same lease back to the Landlord after five years. The Landlord then re-grants the buyer a brand new lease for 99 years. Most leasehold schemes for over 55 year olds are of this type.
If you are unsure what type of lease you have, please contact CCHA‘s Leasehold Team on 0800 085 1171 or leasehold@castlesandcoasts.co.uk.
Selling/assigning your leasehold property
If you are acting on behalf of a friend or relative who is the leaseholder, for whom you have power of attorney, you will need to supply CCHA with a copy of the power of attorney so that we can help you.
If you are selling the property following the death of the leaseholder, you will need to supply CCHA with a copy of the death certificate and a copy of the grant of probate (establishing your right to dispose of the property) to enable us to assist you.
Most leases say that CCHA has the right to nominate a purchaser for your property and must be given a specified time period in which they may do this. However, at present CCHA do not have active waiting lists for most schemes, so you will most likely be able to market the property without having to wait until the specified period has expired.
Before your property can be marketed CCHA will need a chartered surveyor’s valuation (the valuer must be RICS registered an estate agent’s valuation is not sufficient). This valuation establishes the maximum price for your share of the property. CCHA can arrange a valuation on your behalf if you so wish.
When a buyer is identified you (or your estate agent) must provide details to CCHA as we will need to ensure that they are eligible for low-cost home ownership before we consent to the sale. Download the form here to start the process of selling your home/assigning your lease.
Staircasing
Most leaseholders of a shared ownership property can buy further shares in their property (there are some exceptions, most notably shared ownership for over 55 year olds). This process is known as staircasing.
The greater the share you buy in your home, the less rent you will pay, and if you staircase to 100% you become an outright owner and pay no rent.
The governing body for Housing Associations requires that leaseholders acquire additional shares in their property at a price equal to the relevant proportion of the current full open market value of their property.
The price you pay for any extra share is based on the market value of your home at the time you wish to buy, which could go up or down. The value will be set by an independent RICS qualified valuer. There will be some costs involved in staircasing such as a valuation fee and solicitor’s fees.
Whether or not you staircase is entirely up to you, and there are no restrictions on staircasing in the majority of cases. However, we recommend that for certainty you should refer to your lease (if you don’t have one, you can obtain a copy of your lease from the Land Registry)
Buying additional shares in the property to a total of less than 100% is known as interim staircasing; this is usually done in multiples of 25% of the equity. When you interim staircase, your rent will reduce in proportion to the share you own after completion. Service charges will remain unchanged.
If you staircase to 100%, the share taking you to 100% ownership is known as final staircasing. When this occurs, you own the property outright and are no longer a shared owner. In this case, you will not pay rent but you may still pay service charges.
Every time you staircase you will have expenses to pay. Therefore, before deciding to staircase it is worth investigating the full costs involved and carefully considering the additional share you wish to buy.
The price you pay for additional shares is determined by a valuation report from a chartered surveyor (RICS registered). This is required by CCHA in accordance with your lease. We can arrange a valuation on your behalf upon payment up front, or you can provide one yourself as long as the surveyor is RICS registered. The valuation report is valid for a three month period. If your staircasing transaction doesn’t complete within this period you may be required to pay for an update report at current market value. If the value has changed an amended offer will be issued, which could result in additional costs from your lender and solicitor.
Staircasing involves changes to your existing lease, which requires the professional services of a solicitor. Your solicitor will charge disbursements and professional fees for acting on your behalf. Fill in this application form to start the process of purchasing additional shares in your property.
What to do when your lease is short
If the number of years on your Shared Ownership lease has decreased significantly, this is known as a “short” lease, and when this happens the value of the lease reduces. A lease is generally considered short when the remaining term falls below 80 years. A short lease may create difficulties for a leaseholder if they wish to sell or remortgage.
A leaseholder who satisfies certain conditions has a right to be granted a new lease for an additional term of 90 years. If you are a flat owner and own 100% of your home, you may have a statutory right to extend your lease.
If you own less than 100% of your flat, or own a share of a house, you do not have a statutory right to extend your lease, but CCHA may agree on an informal basis to allow you to do so.
If you have a statutory right to extend your lease, there is a formal process that is prescribed by law. To proceed by this route you will need to serve a statutory notice under section 42 of the Leasehold Reform Act 1993; your solicitor will be able to advise on this. You could alternatively request that CCHA uses an informal process to grant an extension, this may be quicker and less costly in terms of legal fees.
If you don’t have a statutory right to extend your lease, you can make a request to CCHA which, if granted, would follow the informal process.
The cost of adding an additional 90 years to the existing term of your lease will be determined by a Chartered Surveyor (RICS registered) using the statutory formula (regardless of whether there is a statutory right to an extension or not). The formula calculates the value that an extension will add to your property. CCHA will arrange this valuation, but you will be responsible for the cost of providing it.
In addition to the cost of the valuation, and the premium, you will also be liable for your own solicitor’s fees and CCHA’s legal costs
Advice on lease extensions can be found here.
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