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Difference between common ownership and joint property ownership

There is nothing better than having a little assistance when buying property. Property prices in the UK are very high and are still rising. These properties have become more and more unavailable to new buyers especially those from the low-income category. These prospective buyers have had to put up with tenanted properties or live with relatives. The government has recognised the plight of low-income earners and established various schemes that allow them to own property. One of these schemes is the joint property ownership scheme. A joint property own pays a price that is lesser than the actual price of a property because of he is sharing costs with a friend. This type of ownership has similarities and differences with common ownership.

What is joint property ownership?

A joint property is owned by a buyer and a housing association. It is the buyer who physically lives in the property. The housing association only holds shares to the property without claiming any living space. The buyer must purchase 25% to 75% of the price of the house. What is left after the buyer pays his share is catered for by a housing association. Because the purchaser both enjoys reduced cost of accommodation and the whole dwelling space, he must pay his housing association some rent. Most housing associations charge a rent of 3% of their shares in the property. The buyer will also be responsible for some property maintenance costs. This way, joint property ownerships are very similar to rented properties. The housing association is the landlord, and the buyer is the tenant.

Joint ownership obligations

A buyer may in time find joint property ownerships to be demanding in terms of rent and obligations to his housing associations. This buyer may choose to purchase the whole house or sell the house. A buyer cannot buy the whole of a common ownership property at once even if he owns 75% shares in the property. He can only buy these shares gradually through a process called staircasing. He becomes the sole owner of the property when his shares reach 100%. He may then cease to pay rent. Most common property buyers with full ownership of property get into leasehold ownership upon purchase of 100% shares.

Selling joint ownership

A buyer may also sell his shares of the property when situations suit him. There are two ways to sell shares. A buyer may sell his shares to a housing association and then use the money plus other funds to purchase more shares in the house. This is one way of staircasing. It mostly applies to buyers with less than 50% of shares.

A buyer can also sell his shares to a new buyer. The buyer who does this ceases to have any claim on the property. His shares of the house are taken over by the new owner. It is not easy to sell joint ownership properties. Housing associations have the Right of First Refusal when it comes to the sale of property. A buyer cannot sell a property without first informing his housing association. The housing association will then put the property in the market for a given duration of time. It is only when it fails to find a new buyer that the current occupant can sell the property. 

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