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If your home was built after 2020, you may be able to buy a 1% share each year, for the first 15 years of ownership, with no hidden costs. That's no:
Buying a 1% share is a quick and easy way to incrementally increase your overall share, if you have a windfall or if you've saved up some extra cash. You might also want to borrow some extra money when you re-mortgage. The choice is yours.
If buying an extra 1% takes you to an 80% share or more, there may be stamp duty implications. We recommend speaking to a solicitor, who can explain and give you advice.
If your home was built after 2020, your property may have one of the new Shared Ownership lease types that are eligible for the annual 1% share.
If you're not sure, log in to your SO Resi account and go to the Buying more shares section. If you see an option to buy 1%, your lease qualifies!
Buying an extra 1% share normally takes less than a couple of weeks, and can be done in the 'Buying more shares' section of your SO Resi account.
The process is as follows:
Step 1: We'll calculate the price of your 1% share. This price will be valid for 3 months, after which you'll have to request a new price.
Step 2: If you wish to go ahead, complete our registration form to tell us that you want to buy your 1% share. We'll then get back to you within a couple of days with details about how to sign the purchase contract by DocuSign and transfer the funds by bank transfer.
Step 3: We'll then organise the paperwork so that you have proof of ownership of the extra 1% share.
That's it! You now own an extra 1% share of your home!
Under the rules of your lease, you are able to buy an extra 1% share each year for the first 15 years of ownership. You don’t have to take up the option every year – just when it suits you. But if you decide not to use your 1% option in one or more years, you can’t carry the unused amounts forward. You are also able to buy larger shares at any time.
The price of your 1% share is based on the UK House Price Index. This is a measure of the average house price in the UK.
We multiply the original cost of your home by the change in the UK House Price Index since you bought it, to give the current estimated value. 1% of this value is the price of your 1% share. Provided your additional 1% share does not increase your total share to 80% or more, there are typically no other costs - no legal costs, surveyors fees or other costs.
Let's say you bought a home worth £300,000 in January 2020. If the UK House Price index has increased by 10% since then, the estimated current value of your home would be £330,000. 1% of this is £3,300. This is the price of your 1% share. This is all you have to pay!
Because the UK housing market is always changing, each calculation is valid for 3 months - or until the 1st April, whichever is first - after which you will have to re-calculate the cost of your 1% share.
If you're eligible and ready to buy an extra 1% share, let’s get started! You'll need a SO Resi account to access the 'Buy more shares' section.