If you're considering buying a shared ownership property, you may be wondering if it's a good idea to purchase one with a short lease. While there are benefits to buying a shared ownership property, a short lease can pose risks and challenges that you need to be aware of. In this guide, we'll explore the pros and cons of buying a shared ownership property with a short lease, and provide expert advice on how to make the right decision.
What is a Shared Ownership Property?
A shared ownership property is a type of property ownership where the buyer purchases a percentage of the property, typically between 25-75%, and pays rent on the remaining share to a housing association or other provider. This allows buyers to get on the property ladder with a lower deposit and lower monthly payments.
Risks of Buying a Shared Ownership Property with a Short Lease
A short lease can pose risks and challenges for shared ownership buyers. For example, when the lease term expires, the property will need to be sold, and any increase in value will be shared between the buyer and the housing association or provider. This can mean that the buyer receives a lower return on their investment than they would with a longer lease. Additionally, a short lease can make it harder to sell the property in the future, as buyers may be wary of taking on a property with a short lease.
If you are unsure about the duration of a lease, at Land Registry Online, we offer a Title Register service that allows you to easily obtain this information. Simply select the desired documents, complete your details, and you will receive your documents by email within a few hours.
Expert Advice on Buying a Shared Ownership Property with a Short Lease
If you're considering buying a shared ownership property with a short lease, it's important to seek expert advice to help you make the right decision. A property solicitor can review the lease and provide advice on the legal implications and risks. Additionally, a financial advisor can help you understand the financial implications of a short lease and provide guidance on how to manage the risks.
Summary
Buying a shared ownership property with a short lease can be a good option for some buyers, but it's important to understand the risks and challenges involved. By seeking expert advice and doing your research, you can make an informed decision that's right for you.
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