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A Guide to Shared Ownership Property Insurance
A Guide to Shared Ownership Property Insurance
A question we often get asked here at Towergate is whether there is any difference in shared ownership property insurance compared with insurance for properties bought outright. This guide will outline the different insurance policies you need to consider when buying a shared ownership property.
What is shared ownership?
Buying a property using the Government’s shared ownership scheme can be an excellent way to get onto the property ladder as it enables buyers to purchase a share of the property (25%-75%) and pay rent on the remainder. Shared ownership in England is designed for first time buyers or those who used to own a property but can no longer afford to buy, and with a household income of less than £80,000 (£90,000 in London).
It is possible to buy a larger share in the future or even buy out the rest of the property so that you are the sole owner. If you decide on this option with your shared ownership property, then you are able to sell the property on the open market. If you wish to sell your property and you don’t own 100% of the property you will have to contact the housing association who have eight weeks to find a buyer, if they are unable to do so you can then sell your property through an estate agent and will receive a percentage of the value related to the percentage of the property you own.
For more information on the shared ownership property scheme visit the Government website.
Buildings insurance for shared ownership properties
Buildings insurance covers damage to the actual structure of the property, such as the roof and walls, and also covers the cost of any future damage to the property in events such as flooding.
In a shared ownership property this will usually be included in the monthly service charge you pay as it is the responsibility of the freeholder. The freehold is typically owned by the housing association, though in some cases the properties are managed by agents. In this circumstance any information regarding the shared ownership property insurance will be held by the property management company.
The freeholder must make sure that they have adequate insurance for the property, or block of properties if you are purchasing a flat. It is possible to get the details of who is responsible for this coverage from your solicitor when you purchase the property.
Contents insurance for shared ownership properties
In the case of buying a shared ownership property, arranging the contents insurance is your responsibility. Contents insurance covers items inside your home, such as furniture, jewellery and electronics, from loss, damage and theft. It can allow you to repair or replace these items without incurring huge costs by having to pay for each item individually.
Some people choose not to take out contents insurance, and whilst it is not compulsory it is certainly strongly recommended as it can save you a great deal of money should something happen to your belongings. If you do decide to take out contents insurance this is something you can arrange yourself and shop around to get the best deal to suit your needs and your budget.
Our policy increases your cover by 10% in December to allow for Christmas presents, which can help to put your mind at ease during the festive season and this 10% uplift can be used to cover wedding gifts too, with the extra 10% cover for the month prior to and after the wedding. Our contents insurance policies can also be extended to cover items away from the home, so if you invest in this option you will be able to claim should you damage or lose your belongings when you are out and about.
As usual, for our cover to remain valid, you must ensure that your windows and doors are locked securely when you leave the property.
This is a marketing article by Towergate Insurance.
Insure your contents with Towergate
If you are considering the shared ownership scheme, contact us on 03447 368 249 to speak to a specialist adviser to discuss your home insurance options.
About the author
James Cooper is a respected industry leader with around 10 years' experience in the home and property insurance sector. He works across a broad range of insurance product and policy development and delivery, including product development; customer sales and marketing; and P&L accountability.
Date: August 31, 2017
Category: Home and Property
