Shared Ownership and Buying Jargon Buster

• Mortgage Advisors: Are professionals who will offer you independent advice on financial matters such as obtaining a mortgage and recommend suitable products from the whole of the market.
• Handover/Practical Completion: When a new build property is signed off as ‘build-complete’ and is ready for you to move in.
• Earlybird reservation: Earlybird reservations are not strictly the same as buying ‘off-plan’ as you are not actually buying or reserving a particular home, you are pre reserving a right of first refusal once the plot is priced and released for sale. Remember that the prices can go up, as the developer will not have the property valued until close to the time of practical completion.
• Off-plan reservation: Off-plan is the term used to describe buying (reserving) a new home before it is built, purely on the basis of the brochure, construction plans, specifications or scale models, rather than after viewing the actual property or show home.
• Deposit: The sum of money required by the lender to access the mortgage you need, usually between 5 and 20% of the purchase price. You pay this when you exchange contracts.
• Reservation fee: Usually a £500 fee taken by the developer to secure the property in your name and take it off the market. Typically, this is deducted from the final amount you pay when you complete on the sale, but you risk losing this if your sale falls through.
• Conveyancing: The transfer of ownership of a property from one person to another by a document, such as a deed, lease, or mortgage. Conveyancing is the process carried out by your solicitor on your behalf to enable you to legally purchase a property.
• Lender/bank: The organisation responsible for providing you with the mortgage loan required to buy your home. This loan is combined with a deposit payment and is to be repaid over a set number of years with interest applied.
• Shared Ownership: The buyer purchases a proportion (between 10% and 75%) of the property and pays rent on the rest to Plumlife. This is a government-backed affordable home-ownership scheme.
• Rent to Buy: A different scheme to Shared Ownership, which allows the customer to rent a home at a reduced rate for a set period of time, while saving up for a deposit to purchase it in the future. Please find more information here: Rent to Buy – Plumlife
• Outright Sales: The sale of a property on the open market, with no use of government affordable housing schemes.
• Estate Charge: An estate charge is usually payable on a new build property and covers the cost of upkeep of the estate as a whole and varies depending on the logistics of the site.
• Ground Rent: The rent paid by a leaseholder to the owner of a building or the owner of the land on which it is built.
• Leasehold: A property which is held under the terms of a lease. The ownership of a leasehold property will revert back to the freeholder once the lease has expired.
• Freehold: To own a piece of land and any property stood on it outright.
• Management Fee: Payable to the Plumlife Management team who are responsible for the administration of the rent paid by shared owners, as well as the ground rent and estate charge if applicable.
• Defects: Aspects of the property that are not in line with the agreed specification, for example poor workmanship by an electrician resulting in a plug not working.
• Defects period/warranty: The period of time from build completion (usually one year) that the builder is responsible for attending a property to put defects right.
• CML: The Council of Mortgage Lenders is an industry body representing mortgage lenders in the United Kingdom. Its members consist of banks, building societies and specialist lenders and represent 95% of mortgage lending in the UK.
• NHBC: The National House-Building Council states its primary purpose as raising the construction standards of new homes in the UK and providing consumer protection for homebuyers through its world-leading, 10-year Buildmark warranty. Established in 1936, NHBC is the UK’s largest provider of new home warranties.
• Exchange: Once the mortgage offer has been issued and the conveyancing process is nearing completion, both buyer and seller sign identical contracts and when these are formally exchanged by the solicitors the deal become legally binding. Between exchanging contracts and completion, either side will almost certainly pay major penalties if they pull out.
• Legal completion: A term used to describe the final stage of a property sale/purchase, when the funds are received by the seller and the transaction is complete. This is the point at which the buyer would receive the keys to their property.
• Profit-for-purpose: A term used to describe organisations that provides support to individuals, organisations and businesses with funds that come from re-investing their profits for social purpose. We’re proud to say that Plumlife homes is a profit-for-purpose organisation.
• Staircasing: To buy more shares in your home to increase the proportion you own. Staircasing is available to those who have purchased a property via Shared Ownership and now want to buy more shares in your home, increasing a share of the equity and reducing rent charges.

Key Information

When you buy a home through shared ownership, you enter into a shared ownership

Lease
The lease is a legal agreement between you (the ‘leaseholder’) and the landlord. It sets out the rights and responsibilities of both parties.

Before committing to buy a shared ownership property, you should ensure you take independent legal and financial advice.

This key information document is to help you decide if shared ownership is right for you. You should read this document carefully so that you understand what you are buying, and then keep it safe for future reference.

It does not form part of the lease. You should carefully consider the information and the accompanying lease, and discuss any issues with your solicitor before signing the lease.