Shared ownership means you will own a certain percentage of your property with the other share being 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 would chose how much of a percentage you would like to buy – this is usually between 25% and 50%, although you can also purchase 75% if affordable.
You would mortgage the share you would like to buy whilst paying rent to the housing association for the remainder that they own.
Not all lenders will offer a mortgage to people on a shared ownership scheme and you may find you need a mortgage deal specifically for shared ownerships.
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 to shared ownership if any of the following apply:
- Your household income is below £60,000
- You’re 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 – you are unable to buy more than 75% with this scheme however for those owning 75% of the property, you do not have to pay rent on the other 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.