Can I Sell a
Share of My House?

Wondering if you can sell your home if you’re not the sole owner, or want to sell or gift equity to someone else? 

Selling a share of your house is certainly possible and there are a few different ways to approach it. We’ll run through various options you may be interested in pursuing…

Is it Possible to Sell a Share Of My House?

The short answer is that yes, in most cases, you can sell a share of your house in the UK – you don’t need to put your entire property on the market. You may see this referred to as “fractional ownership” or a “partial sale.” 

The buyers can either pay in cash or port – “carry over” – their existing mortgage. Note with this latter option, there may be complications with lenders.

Technically, you can sell your house shares to multiple people, although this can get very complex legally.

It’s always best to work with a lawyer to navigate the situation. They will ensure you sign an agreement to protect your legal interest (and the other party’s interest).

Another thing worth noting is that stamp duty land tax could apply if the share you sell exceeds the threshold set. 

However, there’s not one single way to sell a share of your house. Most commonly, people who talk about selling a share of their house are referring to selling a share as a tenant in common or joint tenant.

There are also other circumstances, such as transferring a share, selling a shared ownership home and equity release. We will cover all these options.

Tenants in Common vs Joint Tenants

Often, people purchase their house with someone else (or occasionally multiple people).

In this situation, the people are either tenants in common or joint tenants.  If you want to sell your home or a share of it, the distinction matters. You should be able to find out which you are in your contract.

Selling Your Share as a Joint Tenant 

Joint tenants have equal rights to the entire property. Therefore, they can only sell the house if everyone agrees, and one person can’t decide to sell their share without everyone else’s consent.

Married couples are usually joint tenants. However, there can be up to four owners — in either case, each owner has an equal stake.

Although selling your individual share when you have a joint tenancy is complex, there is a way to do it. You just need to receive permission from the co-owner. This can be straightforward, but may be extremely tricky (such as if there has been a complex divorce).

Even if you’ve contributed more money toward the mortgage or the deposit, you cannot claim a larger share of the house than 50% when you’re a co-owner.

Selling Your Share as a Tenant in Common

In the case of tenants in common, each person owns their own share of the property. All parties don’t necessarily have to hold equal shares — for instance, one person could own 70% of the house and the other 30%. 

This is a popular choice for family members, friends, or business partners who want to pool resources to purchase a property. Generally, a deed of trust outlines how the ownership is split and what will happen if one person passes away or wants to sell their shares.

Just like joint tenants, tenants in common must all agree to sell the property as a whole. However, one tenant can sell their individual share without the other owner’s permission.

So, how exactly do you go about selling your share as a tenant in common?

The first step is to inform the other owner(s) about your intentions to sell your share. While you don’t strictly need permission, this is common courtesy.

Then, contact an estate agent, who can help you with selling your home by listing and marketing it.

Transferring a Share of a House 

In some cases, you may want to transfer equity of the house to somebody else.

Usually, this happens when parents want to give their children or family member a share of the house to help them build up equity and get on the property ladder. It may also be done for commercial purposes.

This is known as a Transfer of Equity. 

If you have a mortgage, you will either need the permission of your existing lender or remortgage to a new mortgage lender to proceed with a transfer. Your acceptance will depend on whether your finances (and those of the person you’re transferring ownership to) meet the criteria of loan approval.

If you don’t want to sell a share of your property and want to gift it instead — or give them the share at a discount — then you can also opt for a concessionary sale. This gifts them equity in the home, making it more affordable for them. 

In either case, after approval from the mortgage lender, the third party will become a tenant in common and own their own share of the home.

Transferring Shares of Your House Through a Will

People often want to pass a share of their house over to someone else through a will. However, the way this works will again depend on your current agreement. 

In the case of a tenancy in common, you can simply pass the share on to somebody else through a will, after which it belongs to them.

If you have a joint tenancy agreement, things are a little more complex as you will need the permission of the other owner(s). Otherwise, the ownership automatically passes on to the other owners by default, in a process known as the right of survivorship. 

However, you can get around this hurdle by switching from a joint tenancy to a tenancy in common.

If you’re transferring shares through a will, you also must be aware of tax. Capital gains tax could apply if you own multiple residences. There may also be inheritance tax — this applies not just to transfers through a will but also within seven years of a death.

Selling A Shared Ownership Property 

Sometimes, the person who owns another share of your property isn’t a fellow tenant — it’s a local council or housing association. This is the case if you bought a shared ownership property, meaning you split the cost of the house with an authority to make it more affordable.

Generally, you have two options here. You can either buy the remaining share of the property (if you have the funds to do so) so you can sell the entire property. This is known as staircasing, and involves its own set of complications.

Or, you can simply sell your share to a third party, who will also take on the house as a shared ownership property. However, you can’t put the property on the open market immediately in this case. Instead, you need to contact your housing association to tell them you want to sell the property. They will try to find a buyer first — if they’re unable to do so, you can work with an estate agent to secure a sale.

Other steps involved in selling a shared ownership property include checking the lease, getting an independent valuation from a RICS surveyor to find the property’s current market value, and completing paperwork for the housing association.

Equity Release (Rather Than Selling a Share of Your Property)

If you’re interested in selling a share of your house to raise funds, there are alternatives to the above methods — especially if you still want to live in your property. Instead, you could opt for an equity release.

One option is a home reversion scheme, which involves a lender giving you 20-60% of a property’s value through what is essentially a loan against your house. Often, homeowners offer the buyer a “lifetime lease,” meaning that the lender will own the property after they die. 

A second option is a lifetime mortgage (or reverse mortgage). In this case, you sell a share of your house for an amount below its market value.

Sell In a Way That Works For You…

Whether you’re more interested in a transfer of equity, equity release, or selling a share as a tenant in common, selling a home is always a stressful process.

Working with house-buying experts can speed up the process by ushering in a quick sale, which avoids some of the complications associated with selling a share. At Property Solvers, we can offer you a quick cash sale in as little as 7 days.