In many circumstances, you may wish to sell a share of your house.
For example, if you want to help one of your children get onto the property ladder. Or, if you are living under a joint tenancy, you may wish to sell your share of the property to someone else.
Whatever your situation, read on to find out more about selling a share of your house in the UK.
Can I sell my 50% share in a house?
This depends on the details of your specific contract.
When you agree to the joint ownership of a house with another person, the rights of each party should be outlined in a contract.
When it’s ‘Yes’ without permission
If the property is owned under tenancy in common, you have the right to sell your percentage of the house without the permission of the person you are living with. Therefore, yes – you can sell your share in a house.
When it’s ‘Yes’ with permission
If the property is owned under a joint tenancy, then you can only sell your 50% share with the other tenant’s permission.
Why some people prefer a tenancy in common
The above scenarios show why many people prefer a tenancy in common, rather than a joint tenancy.
In the event of a breakdown of relationship with the other tenant, a tenancy in common prevents you from being held hostage by the other…
Joint tenancy vs tenancy in common
The main difference between a joint tenancy and a tenancy in common comes down to how shares are divided between shareholders.
A joint tenancy is when all property owners hold the same share. This usually means that each tenant holds 50% – but if there are more than two tenants, the share will vary accordingly.
Tenancy in common is the most popular form of joint ownership. This is when tenants own a share of the property – but not necessarily of the same size. Therefore, one (or several) tenants can hold a greater share than others.
Advantages of tenancy in common agreement
There are several advantages of a tenancy in common agreement, including:
- You have full access to the property, no matter your share
- You do not need the other owner’s permission to transfer ownership
- You can use your share as collateral for a loan without permission from the other tenant(s)
- You cannot leave your share of the property to an heir (e.g. in a will).
Advantages of joint tenancy
With a joint tenancy, a property automatically passes to the surviving owner upon the death of the other owner. This is valuable for avoiding expensive and time-consuming probates.
It also ensures that properties remain intact, so to speak, and don’t get divided among multiple heirs. This is beneficial for owners want to maintain family homes or business properties.
The shared responsibility of joint tenancies alleviates the burden on individual owners.
And in some cases, joint tenancy may offer protection against creditors seeking to collect debts from individual owners. When the property is jointly owned, creditors often have limited recourse to seize assets for the debts of an individual owner.
Disadvantages of joint tenancy
With a joint tenancy, you cannot leave your share of the property to an heir (e.g. in a Will).
Instead, if you pass away, your share passes immediately to the other tenant.
A joint tenancy also means that you cannot sell your share of the property without the permission of all other owners.
And lastly, if the other tenant files for bankruptcy, you may have to sell your share so they can pay the debt.
Can you sell your shared ownership house?
There is nothing stopping you from selling your shared ownership house. In this sense, it is just like any other property you own.
However, before doing this, many people opt to buy the remaining share of the property from the housing association that owns it.
This means they will own 100% of the property before selling it. If you are unsure about how to reach this stage, then you should consult a legal professional with experience staircasing (i.e., buying more shares) to 100% ownership.
The lease of your shared ownership house will outline the steps you must follow to sell your home. These steps will typically include:
- Informing the housing association of your desire to sell
- Undertaking a Royal Institution of Chartered Surveyors (RICS) red book valuation
- Instruct the housing association on how to sell your home
- Transferring the lease to a buyer of their choice
In some situations, however, you will not be required to transfer the lease to another buyer. Instead, you will place the property on the open market.
In either scenario, the price of your house will be no more than the current market value of your share in the property. The housing association will then typically charge for the resale process – which is referred to as a ‘nomination fee’.
Can you sell a share of your house to your children?
Yes, if you follow the correct steps, you can sell a share of your house to your children.
To do this, you will have to apply for a ‘Transfer of Equity’. This process involves adding your children to the mortgage and deeds, while staying on the mortgage and deeds yourself.
This can be done with your existing lender or a new lender for remortgaging.
To determine whether you are allowed to sell a share of your house to your children, the lender will review the affordability of the loan.
They will also consider your child’s income, which is a significant factor in getting their permission (just like any other house purchase).
Similarly, selling a house privately to your friend is also a possibility.
Can you give your house as a gift to your children?
Is it possible to present a house as a gift to your children. However, it’s crucial to bear in mind that a house constitutes a substantial asset, which means it carries legal and financial ramifications for both you and your child.
When gifting a house, it’s crucial to ensure that the transfer of ownership adheres to legal protocols and is executed through the appropriate channels.
Can I leave my share to my children in my will?
Yes, under most circumstances you can leave your share of your house to your children.
For example, under a tenancy in common, you can bequeath your share of the property to your children in a will (i.e., a last will and testament) and it will legally transfer over to them.
Under a joint tenancy agreement, you will need your co-owner’s permission to sell your share of the house to your children.
So, when you decide you want to sell a share of your house to your children, you might be advised to switch to a tenancy in common (if you are not under that arrangement already). This transition will allow you to sell a share to your children.
Looking to sell quickly?
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