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Jargon buster

Here is an explanation of some of the key terms that you might come across when looking to buy a shared ownership property.

Contents insurance

Insurance that you will need to take out to cover your personal belongings in your home.

Council housing register

A ‘waiting list’ held by the local council, with the names of applicants waiting for suitable housing.

Energy performance certificate (EPC)

Under the law, you need an EPC before you can sell a property. We cannot start to sell your home until you have an EPC and have sent us a copy. EPCs are usually valid for 10 years.

Equity share

This is the share of the property that you own. The share you start with is usually called the share ‘you purchase initially’. You can increase this share by buying extra amounts until you own the full share outright.

Freehold

The freeholder of a property owns it outright, including the land it’s built on.  If you buy a freehold, you’re responsible for maintaining your property and land, so you’ll need to budget for these costs. Most houses are freehold but some might be leasehold – usually through shared-ownership schemes until final staircasing then the owner may obtain the freehold interest.

Ground rent

This is a payment made by the owner of a leasehold property to the freeholder, as required under the terms of the lease. A ground rent is created when a freehold piece of land or building is sold on a long lease.

Holding or administration fee

Money paid by applicants to reserve the property they want to buy (only required at some developments) and refunded on completion.

HomeBuy agent

If want to buy a shared-ownership property (new build or resale) you must be registered with the appropriate agent. This is so you can make sure that you qualify and you will then receive a registration number.

Homebuyer’s report valuation

A more in depth report that you should ask for if you are considering buying an older property.

Homes and Communities Agency

A government funded body that regulates affordable housing throughout the UK.

Key worker

People working in professions that the local authority and HomeBuy agents consider to be important to the society. Key workers can qualify for schemes that they might not qualify for otherwise. Examples of key workers are police, nurses and teachers.

Lease

A legal document between us and the shared owner. The terms in this document are legally binding.

Leasehold

With a leasehold, you own the property and its land for the length of your lease agreement with the freeholder.  When the lease ends, ownership returns to the freeholder unless you can extend the lease. Most flats and maisonettes are owned leasehold.  When buying a leasehold you either have a new lease with a term of for example 125 years or if it is an older leasehold property, you’ll take over the lease from the previous owner.

Managing Agent

Your property maybe managed by a Managing Agent who is legally contracted to be responsible for maintaining the building and the estate in which you live. Your service charge will cover their fees and charges for services. 

Purchaser

The person who is buying the property.

Rent

The monthly charge you will pay to us for the part of the property that you do not own.

RICS surveyor

Royal Institute Chartered Surveyor. All valuations must be carried out by an approved surveyor.

Service charge

A monthly charge covering outside maintenance, shared areas, a contribution to the ‘sinking fund’, leasehold management administration charges and buildings insurance.

Sinking fund or capital expenditure reserve fund

A fund that all leaseholders pay into. The money is saved for future large repairs or replacements to the outside of the building or to a shared area.

Staircasing

Buying more equity (shares) in your property and therefore paying less rent.

Survey

A report on the condition of a property that is for sale.

Valuation

The price the property has been valued at on the open market by a Royal Institution Chartered Surveyor.

Vendor

The person who is selling the property.