Resale guide

A guide to reselling your Octavia Housing shared ownership property

Shared ownership is a valuable alternative for those who want to buy a property but can’t afford to buy one outright. If you are a shared owner who wants to sell your equity share, you must allow Octavia Housing to nominate a buyer as per the terms of your lease. Depending on the details confirmed in your lease, we usually have eight weeks in which to do this.

Step 1 - instructing a valuation

To start the process, your home needs to be valued. This must be done by a RICS (Royal Institute of Chartered Surveyors) qualified surveyor who will provide a written valuation report. We will arrange for the valuation which you will need to pay for. We will let you know the fee when you contact us.

To arrange the valuation, complete the ‘valuation instruction’ form attached to this guide and post it to the address provided along with the correct fee.

Upon receipt of your completed application, we will instruct the valuer who will arrange an appointment to visit your home, assess its value and take photographs to be used in the sales brochure.

If you have made significant improvements which have increased the value of your property, the surveyor will take these into account during the valuation. The price will reflect these. If you decide to proceed with the sale, the price at which your home is marketed will be based on this valuation.

Usually, we expect to notify you of the valuation figure within 14 days of receipt of the notice assuming there are no delays in obtaining access to your property.

Requirement for Energy Performance Certificate (EPC)

By law, you will need to arrange for a domestic energy assessor to provide an Energy Performance Certificate (EPC) before we can advertise your property. You do not need to have received your EPC before we can advertise your property, but we will need proof that you have arranged the EPC. This proof could be a receipt, email or letter from the EPC provider. Please send us this proof with your valuation instruction form.

An EPC is valid for 10 years. Some properties were allocated a certificate when they were constructed. Please check to see if you already have one. You should be able to find an EPC provider on the internet or in Yellow Pages, or the valuer visiting you may be able to recommend one.

Completing the form

When completing the form, please ensure that you:

  • make sure it is fully completed and signed by all leaseholders.
  • list any improvements that you have carried out to the property, if you feel these will affect the valuation.
  • provide a valid contact telephone number and email address for use in the daytime, failure to do so may hold up the process.
  • enclose your cheque for the valuation made payable to Octavia Housing (we will instruct the valuer upon receipt of your cheque).

Step 2 - receipt of valuation

Once the surveyor has completed the valuation report, a copy of this will be sent to us. We will send it to you with confirmation of the sale price.

The sale price is calculated on the valuation of your home and on the percentage that you own. So, the Valuation x The Percentage Owned = The Sale Price. For example, if your home is valued at £200,000 and you own 50% of the property, then the sale price would be: £200,000 x 50% = £100,000.

You can’t sell your property for more than the sale price given, although you can sell your property for less. Accepting a lower offer means you’ll receive less for your share.

As property prices are constantly changing, the valuation is only valid for three months. If you haven’t agreed a sale and exchanged contracts within this time, you may need to have your home revalued at your own cost.

Improvements

If you have made improvements to your home and the surveyor believes that these have had a positive effect on your home’s value, you will sell your home and improvements separately in order to receive the financial benefit.

For example, if you own 50% of a property valued at £204,000 including improvements valued at £4,000, your sale price will be broken down as follows:

  • 50% share: £100,000 (50% share of £200,000 excluding improvements)
  • Improvements: £4,000
  • Total sale price: £104,000

It is important to note that whilst you are seeking the full premium of the sale price including improvements valued at £104,000, a lender will only lend against the overall percentage you own in the property. In the example given above the sale price would be calculated as follows:

  • Current full market value: £204,000 (including improvements)
  • 50% share - £102,000

This leaves a shortfall of £2,000 between what the lenders will lend and the sale premium you wish to achieve. The new purchasers would have to find an additional £2,000 which may cause difficulties. You are free to negotiate with the purchaser on the value of the improvements.

Step 3 – instruction to sell

Once the valuation is completed and you wish to proceed, you will need to give us formal instructions to sell your home. You will also need to provide the Energy Performance Certificate (EPC).   

As stated in your lease, Octavia Housing has the right to nominate a buyer and has eight weeks to market your home. Our charge for selling your home includes finding eligible buyers, qualifying and nominating buyers, and progressing the sale from offer stage until completion. The charge is 2% plus VAT of the value of the share that you own and is payable on completion.  This compares favourably with instructing an agent who will typically charge between 1.5% to 2% of the full sales value.

A list of approximate costs associated with the selling process are detailed below. (Please note these costs are for guidance only. Accurate quotes can be obtained from your solicitor)

  • The valuation fee - £360
  • Energy Performance Certificate - £40 - £60
  • Your legal fees - £800 - £1,000
  • Fees payable to Octavia solicitors - £240 plus disbursements
  • Any outstanding rent, service charge of tenant ledger payments. Please check that you are up to date with all service charge payments and rent.
  • File retrieval fee - £12
  • Management administration f - £120 (this is for providing copies of information about the account. If your solicitor requests this information you will be responsible for payment of the fee.)
  • Octavia Housing selling fee - 2% of value of the share that you own.

Your building society may also charge you to redeem your mortgage if it is not transferable to another property. If you have a fixed rate mortgage you will need to check whether any penalties will be incurred if you redeem early.

Step 4 – finding a buyer

Once we have received your instructions along with the EPC, we will start marketing your property. We will advertise online, contact potential applicants and send out direct mailings to our database of applicants.

Anyone interested in your home will call you to arrange a viewing. If they want to buy, they will need to contact us. If several buyers are interested in your home, we will assess buyers on their individual merits and prioritise them in order to find the most suitable buyer.

If we haven’t nominated a buyer within eight weeks, you are free to approach an estate agent to sell your share on the open market. It is possible to sell 100% of your home via the estate agent. This means your buyer will pay the full price of your property and, simultaneously, you will pay Octavia Housing for the remainder of the shares.

Step 5 – instructing solicitors

Once a buyer has been found for your property, both you and your buyer will provide us with your solicitor’s details and we’ll instruct the solicitors to proceed with the legal paperwork.

Please note that it usually takes about 6-12 weeks for a sale to proceed to legal completion.

Step 6 – exchange an completion

Before exchange, you will need to make sure you are up to date with your rent and service charge and any other payments required in terms of the sale. Rent and service charges are payable up to the date of completion. We calculate these and your solicitor will arrange payment of these on completion along with payment of legal costs and sale fees.

Once you have legally completed on your sale, all keys and any parking permits must be passed onto your purchaser. Please liaise with your solicitor with regard to handover of keys. Make sure that you have instructed your bank or building society to cancel your direct debit payments in relation to your property once legal completion has taken place.

Frequently asked questions

What happens if Octavia Housing nominates or is notified of a nominated applicant within the eight week period?

We will:

  • write to you and advise you that you must continue to take no action regarding the sale of the property until it is able to determine whether or not any nominated applicant is able to proceed.
  • take references for any prospective applicant, carry out a financial assessment of the applicant and interview them.
  • arrange for the applicant to view the property.

In normal circumstances this process may take up to four weeks.

What happens if the nominated applicant wishes to proceed?

Providing we are happy with the purchaser in every respect, we will write to you to confirm that the purchaser wishes to proceed and ask you to provide the name and address of your solicitor so that the sale may be progressed. You will need a solicitor to act for you in the sale of your share and your legal fees are your responsibility. You will also be responsible for Octavia Housing’s legal fees.

If the nominee fails to enter into a binding contract to purchase your share within three months of the receipt of your formal notice to assign, you are free to sell the property on the open market either as a shared ownership concern or outright.

What happens if Octavia Housing is unable to find a purchaser?

We will write to you, shortly after the expiry of the eight weeks period to advise you that you may proceed to sell the property yourself. You can appoint an estate agent and deal with them directly. You will need to pay their fees.

We will, however advise you if it is possible to find a prospective purchaser after this time, although you will not be under any obligation to accept the nominated purchaser.

What instructions should be you give to an estate agent?

  • You may instruct your estate agent to find either a purchaser for your share or an outright purchaser to buy your property.
  • You should of course, make sure that you have sufficient funds to allow for all legal fees (yours and ours) and your estate agency fees.
  • Your estate agent should be made aware that the price for which they may sell your share to another owner is based on our valuer’s assessment and that the share may not be sold for less than this amount.  You should, therefore, make them aware of this amount.
  • If the estate agent has interest from a buyer who wishes to purchase 100% of the property; this is permitted and the sales proceeds will be split in line with the share owned by you and Octavia Housing
  • Your estate agent should provide us with the name and address of any purchaser. 
  • Your estate agent should notify us, when a sale has been agreed, by sending a copy of the memorandum of sale. Our solicitor will be instructed to enable the transaction to proceed. Your rent account must be up to date on the completion date or the sale will not proceed.
  • In the event that your estate agent finds a shared owner to buy your share, please remember that we will want to approve any new shared owner and the procedures previously described will be carried out. Please also note that we have the right to reject any prospective applicant if the applicant is unable to meet Octavia Housing’s financial criteria for shared ownership.
  • Under the terms of the lease this is normally three months. Any prospective purchaser must exchange contracts within this period. Failing this, the property must be re-valued for the purpose of recalculating the repayment of Octavia Housing’s share (in the case of an outright sale) or the actual sale value of the share (in the case of a sale of the share to a new shared owner)
  • The cost of any revaluation is your responsibility. Valuers will normally carry out a revaluation at a much reduced fee.

How long is the open market valuation valid for?

How to contact us about selling your home

Please contact the home ownership team to discuss selling your shared ownership property. You can contact them via customer services by email on info@octavia.org.uk or phone on 020 8354 5500.