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Throughout the UK you can find hundreds of housing associations, which offer discounted flats, houses and other properties to people that qualify for them. Selling your home to a housing association is similar to the sale of property to a council, and you’ll find that there are certain pros and cons involved, as well as some alternatives for getting a competitive and swift sale.
- What is a housing association in the UK?
- The steps for selling your home to a housing association
- Potential benefits of selling a property to a housing association
- Disadvantages of selling your home to a housing association
- Capital Gains Tax and the sale of your property
- Getting your leasehold or freehold home ready for buyers
- Alternatives to housing associations for selling your property
- Top queries about selling a home to a housing association
What is a housing association in the UK?
In the UK, there are over 1,500 housing associations, which are non-profit entities that are created to give people with limited funds the potential to buy a home, as explained by residential property review site HomeViews.
A large number of housing associations throughout the country will work closely with local councils on developing strategies for providing affordable home options in their area, which is why people often use the words "council" and "housing association" interchangeably when discussing the potential for selling a property to one of these two entities.
The difference between selling to a council is that housing associations are not themselves local authorities with elected officials, even if some people might talk about them as being the same in principle.
Because they are non-profit organisations, housing associations take any profit that they might make from the sale of affordable houses and flats and then put the money back into developing and offering even more low-price properties for those in need. Some of the funds are also used for basic maintenance on their existing portfolio of homes, or for making improvements to them.
The main type of property that a housing association buys are leasehold, where you are the legal owner of a house, flat or other type of home for a specific number of years as specified in a lease agreement with a freeholder of the property, and you pay them a yearly ground rent.
Housing associations across the country are able to purchase freehold properties, where you own the home and the land on which it was built completely, but this is not as common as buying leasehold houses and flats, particularly those that the non-profit once owned.
The steps for selling your home to a housing association
There can be many reasons for why you might be looking to sell your freehold or leasehold home, such as having found your next dream property, needing to raise funds quickly to deal with a financial problem, wanting a sale because you’re moving overseas, and many other scenarios.
Whatever your reason for wanting to sell your home, if you’re thinking about asking a housing association to buy it then it can be useful to learn about the process that will be involved. You might find that it’s more complicated and time-consuming than some other methods for selling your flat or house, for example getting in touch with a fast buyer like LDN Properties.
Your first step is researching which housing associations are located near you, and then getting in touch with them to describe your property and find out if they want to buy it.
Should the housing association be tentatively interested in purchasing your home, they will send someone to survey the property and inspect the interior and exterior. The results of this survey will help inform the eventual offer that the housing association may make for your home.
If you are in favour of the offer that you’re given, the rest of the process will continue much in the same way as trying to sell any type of property. The housing association will contact your designated legal representative so that both sides can sign and process all for the required legal documents, and once contracts are exchanged you will receive the final sale proceeds.
But you should know that this overall process can move rather slowly, and so if you would like to potentially get a much speedier sale for your house or flat then you should consider asking a fast buyer like LDN Properties to make an offer. That’s because these companies take just a few short weeks to complete every step needed for buying any variety of property.
Potential benefits of selling a property to a housing association
There are a few advantages that are associated with selling your house or flat to a housing association, but many of them revolve around demand for properties in your area.
For example, if there is a significant shortage of housing stock available for people, then housing associations might be seeking to buy homes more urgently. This in turn could benefit you if they are interested in making a speedy purchase of your property, but it’s also not a strategy on which you should rely because the property market can be unreliable.
Another possible perk of selling your house or flat to a housing association is if you are the owner of several properties and you are looking to reduce your portfolio of homes, because you can prioritise selling any homes that you don’t want to keep to the housing association.
Housing associations can sometimes also be a good backup option for selling your property in the event that you are struggling to sell your home, and there can be a number of factors that might affect this, including demand levels and the current reputation of your neighbourhood. But this implies that you may still have to settle for a lower sale price, which is a drawback.
Disadvantages of selling your home to a housing association
One important potential drawback of selling your property to a housing association applies if you originally purchased the home at a discount from the same non-profit organisation.
As the UK government’s website notes, if you decide to sell your flat or house within the first 10 years of having bought it from a housing association, you must give them the right of first refusal, meaning they get to make an offer on it before you can look for other buyers.
The housing association will have eight weeks to think about whether to purchase your property, which can be a drawback because it will yet more time to the overall selling process. If they don’t make an offer during that time, you are then free to seek offers from anyone else.
You could face increased expenses or reduced profit when selling to a housing association within the first decade of owning such a property, because you must refund all or part of the discount that you received on the price if you’re trying to sell it within five years of owning it.
In the first year of ownership, you are required to pay the housing association back the full amount of the discount. This drops to 80 percent of the total discount during your second year of ownership and then down to 60 percent of whatever discount you received if you’re selling in the third year of ownership, followed by 40 percent of the total discount in the fourth year of owning the home and finally 20 percent of the discount if you’ve owned the property for five years.
Capital Gains Tax and the sale of your property
The UK government charges Capital Gains Tax on houses, flats and other valuable physical assets such as artwork, cars and other personal items. If the tax applies to the sale of your home, it will be levied based on the final sale price that you able to get for the property.
Knowing that you might have to pay this tax is an important part of the budget planning process for selling your home, especially if you’re currently experiencing financial difficulties.
Depending on your situation with the sale of your property there could be other requirements included as part of the Capital Gains Tax process, as explained by Crowe UK, a tax and other financial issue advisory firm. It’s worth checking with a tax professional to ask about your potential Capital Gains Tax liability and whether you lower or even eliminate it.
Getting your leasehold or freehold home ready for buyers
Whether you want to sell your house or flat to a housing association or are thinking about other approaches for finding a buyer, there are some steps you can take to improve your prospects of generating more interest from prospective buyers, hopefully attracting better-priced offers.
For the exterior of your home, you should see what no-cost or low-expense and quick work you could do to improve the appearance of the property – this might include giving the window ledges a fresh coat of paint, fixing any broken glass or replacing missing roof tiles. If you have a green space like a yard or garden, you should also mow this and get rid of any weeds.
Such seemingly simple work can require very little effort but can help to make buyers see your home as well-maintained, and potentially more valuable and worth offering more to purchase.
The same applies for the interior of your flat of house, because you should clean every room, removing any mess and clutter and trying to make each one look as spacious as possible. If you’ve got any pets, clean up any hair they might have shed and also keep them securely locked away from view if anyone comes to tour your property on a viewing.
You want people who come to your home to have the best possible impression of it, because a property that looks like it’s kept in great condition might appear more valuable to buyers, which could result in a higher-priced offer that would hopefully generate more profit for you.
Separately, one issue you may have to resolve is whether you should invest time, effort and funds into repairing any larger-scale structural problem with the home before selling.
This can include a wide range of flaws such as high amounts of asbestos, dry rot, the presence of Japanese knotweed, damp, vandalism and more. Buyers will likely look at this problem and calculate how much it would cost them to repair the issue if they owned the property, and then reduce their offer price by at least that amount, which will reduce your eventual proceeds. Fixing the problem before selling would prevent this situation from being able to occur.
But there are many homeowners who will not have the money, energy or time needed to pursue what could be lengthy and large-scale work on their property before trying to find a buyer.
If you find yourself in this latter category then your best option could be contacting a fast home buyer like LDN Properties, because these companies make competitive and speedy offers to buy freehold and leasehold homes "as is" even if they have unresolved structural issues. It can a stress-free and straightforward way to sell what some see as a problem property.
Alternatives to housing associations for selling your property
If you have read this guide and no longer want to sell your home to a housing association, there are several viable alternative options. You could sell to a fast property buyer, use an estate agent, sell your home at an auction, or try selling the house or flat without any assistance.
There are some notable disadvantages with some of these methods, for example requiring that you pay a third party commission or taking many months to complete the sale. Other methods have strong advantages, like not having to pay any fees when using a fast buyer. You should write down your top aims with selling – such as your goal sale price and how fast you want to sell your home – and then compare them against the specific details of the four methods below, because this should help you to identify the approach that pairs best with your needs.
Selling to a fast property buyer
As the name implies, selling to a fast property buyer is usually the fastest way to sell a flat or house because the overall process should be completed within weeks, and that includes the final important steps such as paying you the proceeds and exchanging contracts.
These companies, such as LDN Properties that was launched in 2003, make quick and fair offers to buy almost any type of leasehold or freehold property. For example, the lengthy list of purchases that LDN Properties has made over the decades includes properties in high risk flood zones, eco houses, flats with cladding, lock-up garages, houses near railway lines, properties where the owner can’t find crucial documents like the title deeds, and more.
Another benefit of selling your home to a fast property buyer is that you won’t have to pay any commission, which will benefit you by reducing your total selling costs. But if you sell your property via an auctioneer or estate agent then you will be required to pay them commission based on your home’s final sale price, and this will add to your overall expenses.
Using an estate agent
Estate agents are regulated by the National Trading Standards Estate and Letting Agency Team, which sets standards for how these companies should operate, as well as establishing processes for addressing complaints from buyers and sellers, and various other features.
When you sell with an estate agent, they’ll prepare a listing that describes your home and includes photographs of the inside and outside of the property, and then advertise that listing in local newspapers, their office and online. The estate agent will also schedule viewings for people interested in your home, and hear offers, hopefully taking one to completion.
For all of this effort, estate agents will make you pay commission as a percentage of the price at which your property sells. This charge is taken out of the sale proceeds right away, which will increase your expenses with selling.
It can also be a somewhat slow option for trying to sell your home, as it might be more than a full year before you receive an offer or are able to exchange contracts with the buyer.
Selling your home at an auction
Instead of using an estate agent, you could consider trying your luck by selling your home at a property auction.
They will provide similar support as an estate agent, in terms of producing and advertising a listing for your home, and they will also host the auction and hear bids from buyers. If someone places a bid on your property at or above the reserve price – the lowest value that you agree your home can sell – then this is a binding legal transaction that you or the winning high bidder can sue to enforce, so make sure you pick a reserve price that will produce a profit.
As you try to calculate your potential profit from the sale, take account of the fact that auctioneers usually charge commission as a percentage of a home’s final sale price, and this will add to your costs because the fee will be subtracted from the sale proceeds right away.
This isn’t a swift way to sell your flat or house, because it can take many months, starting with a wait of at least several weeks between the day on which you list your home for sale and the day on which the auction happens. And if the property does sell, the winning high bidder typically has about 28 days to complete all of their required steps, such as signing necessary papers.
Selling without any assistance
A fourth way to sell is doing so alone, which means that it will be your responsibility to create and market a listing for your home, along with scheduling viewings and fielding offers. It’s a large amount of work that could take up a lot of your time and create much stress.
Perhaps the only obvious advantage of selling your home this way is that you would not have to pay an auctioneer or estate agent any commission. But this saving could be cancelled out by the money that you’ll have to spend on advertising your listing and other expenses.
You might also be waiting a very long time to secure a buyer using this method, because the typical timeline for selling a home solo is often more than an entire year.
As an alternative, you should contact a no-fee fast home buyer like LDN Properties because you’ll get the same benefit of not having to pay any commission, but with the additional perk of being able to complete the sale of your property within a few short weeks, not a full year.
Top queries and answers about selling property to a housing association
Homeowners looking to sell their home may have some questions that need answering, ranging from the different types of property we can buy through to selling with old electrics. Here are some of the top questions we’re asked when considering selling to a housing association:
Your top questions when considering selling to a housing association
Housing associations are somewhat similar to councils in that both focus on building and providing low-cost houses, flats and other properties to people who qualify because of reduced income and other reasons. But they differ from councils in that housing associations do not consist of elected officials, and they are technically also considered non-profit entities.
There are a few limited potential benefits that can sometimes occur when selling a leasehold or freehold home to a housing association. The main pro of selling this way is when the housing association has high demand for purchasing properties in your neighbourhood, because this implies that they will likely move quickly to complete the process of buying your home.
If you originally purchased your home from a housing association and have owned it for less than five years then you may have to repay the non-profit organisation part or all of the discount that you saved from buying it at their reduced sale price. Depending on the type of home you’re selling, it might simply also not be what the housing association is currently looking for.
There are a number of steps that you can take to make your home appear well looked after and therefore possibly more valuable to interested buyers. These include tidying up all of the rooms and removing any clutter from them, and doing some affordable and speedy improvement work to the exterior of the property, for example replacing any tiles that are missing from the roof.
You don’t have to worry about paying any fees if you get in touch with a fast buyer to sell your flat or house, or if you sell it without any help. Should you sell through an estate agent or auctioneer then you’ll be required to pay commission often as a percent of the sale price.
If you use an estate agent or auctioneer, or you attempt to sell the property without any third party support, then you might find it takes many months or even more than an entire year before you secure a buyer. By contrast, if you sell to a fast home buyer like LDN Properties then they should be able to complete the entire process within just a handful of weeks.
It depends on several factors, including the price at which your property sells, because Capital Gains Tax is charged based on how much profit you might make from the sale of your home compared to the price at which your first bought it. Speak with a professional for more information on this topic.
