Shared ownership means you will own a certain percentage of your property with the other share owned by a housing association. It will be a leasehold property for this reason.
How does shared ownership work?
When you first purchase the property, you can choose an initial percentage to buy, typically between 10% and 75%, depending on affordability and the scheme’s options. Under the current model, you may start with a minimum 10% share, with future increments as low as 1% if you wish to gradually increase your ownership.
You would mortgage the share you choose to buy while paying rent to the housing association for the remainder. Some mortgage lenders offer specific deals for shared ownership properties.
Should I buy my home under shared ownership?
Shared ownership schemes are ideal for people who are unable to purchase a whole property financially.
You should still think carefully before committing as it will still be a big financial commitment for you and you will be liable for all of the property utility bills even if you do not own all of the house yourself.
Can I buy a shared ownership home?
You are eligible for shared ownership if any of the following apply:
- Your household income is below £80,000 (or £90,000 within London).
- You are a first-time buyer.
- You currently rent a council or housing association property.
- You have owned a house in the past but now cannot afford to purchase a new one.
For anyone over the age of 55, there is a separate scheme called the Older People’s Shared Ownership (OPSO). Under this scheme, you cannot buy more than 75% of the property. However, if you own 75% of the property, you are not required to pay rent on the remaining 25%.
What happens after I buy a shared ownership property?
You can always look to buy a bigger share in your property until you own 100% of it, if the housing association allows this. This is known as staircasing.
How much you will pay for each share is dependent on the value of the property at that particular time – if house prices have dropped, you will pay less and vice versa.
You will need to be aware of the associated costs everytime you purchase another share of the property including valuation and legal fees.
How do I buy a shared ownership home?
You will need to buy a shared ownership property through the Help to Buy agent in the area where you want to live. They will be able to give you help and advice regarding the scheme.
