Shared Ownership gives first-time buyers and those that do not currently own a home the opportunity to purchase a new home.
What is Shared Ownership?
Shared Ownership gives first-time buyers and those that do not currently own a home the opportunity to purchase a share in a new build or resales property, The purchaser pays a mortgage on the share they own, and pays rent to a housing association on the remaining share.
Because the purchaser only needs a mortgage for the share they are purchasing, the amount of money required for a deposit is a lot lower when compared to the amount that would be required when purchasing outright.
Why buy a Shared Ownership home?
Shared Ownership is essentially for people who would like to own their own home but cannot afford to buy on the open market. The cost of ownership is reduced by:
- The rent is less than the rate charged on the open market and usually charged at 2.75% of the property value per annum
- You can start with a little as 25% share in some cases
- Your deposit can be 5% of the price of the share, not of the whole property.
- Stamp duty land tax (SDLT or simply ‘stamp duty’) can generally be deferred until your share reaches 80%.
For your rights and responsibilities as a Shared Owner, read our shared owners FAQs
The government has introduced a new model lease for Shared Ownership. Our current Shared Ownership homes are not impacted with the changes. We will update with new details when available. In the meantime you can learn more about the changes that will come into effect for some properties later in 2023 by checking the government website.
Increasing your share
The purchaser has the option to increase his share during their time in the property via a process known as ‘staircasing’, and in most cases can staircase all the way to 100%, thereby owning the property outright. snared ownership properties are always leasehold.
Read on for more information about Shared Ownership and to see whether you are eligible, or start your Property Search now.
Shared Ownership properties can often be found in private developments as the provision of a certain number of Shared Ownership units will often be required as a part of the planning permission for a development, this can put affordable housing in the heart of some prestigious postcodes.
What am I buying when I buy with Shared Ownership?
Effectively you are buying a leasehold house or flat, and this will be either a new build or resale home. However, as you cannot presently afford to buy a home outright, you are paying rent on the portion that you can’t afford.
You have the option to buy further shares – up to and including 100% ownership in most instances – if and when you choose to do so. The price of buying further shares (or ‘staircasing’) will be based on an independent valuation at the time that you purchase the further share.
What are the eligibility rules for Shared Ownership?
There are some general eligibility requirements that anyone wishing to buy a Shared Ownership home must meet. The general eligibility criteria for Shared Ownership is as follows:
- You must be at least 18 years old.
- Outside of London your annual household income must be less than £80,000.
- In London, your annual household income must be less than £90,000.
- Shared Ownership purchasers are often first time buyers but if you do already own another home, you must be in the process of selling it.
- You should not be able to afford to buy a home suitable for your housing needs on the open market.
- You must show you are not in mortgage or rent arrears.
- You must be able to demonstrate that you have a good credit history (no bad debts or County Court Judgements) and can afford the regular payments and costs involved in buying a home.
You should have savings or be able to easily access at least £4,000 to cover the costs of buying a home (this is a guideline figure – the actual amount may vary please discuss this when speaking to a sales representative).
You will also need access to the deposit amount required. For Shared Ownership, this will usually be 5-10% of the equity share you are buying.
How to buy a Shared Ownership home
Getting started with Shared Ownership is not as complicated as people might think. First of all. you should check if you are eligible. Please note that there may be separate terms regarding priorities and affordability. These will be outlined on each listing.
When you have chosen a property, you will need to make sure you have the required deposit and get a mortgage.
To research the mortgages available across the market you can use the Share to Buy Mortgage Affordability Calculator to determine how much you may be able to borrow, and the Share to Buy Mortgage Comparison Tool gives you an insight into the Shared Ownership mortgages available on the market.
Frequently Asked Questions
Select the category below to see the FAQ's relating to that topic.
Shared Ownership is only available on properties that have been built for that scheme by a housing association using Government subsidy. Therefore, the option does not exist to make an offer on an outright sale property on a Shared Ownership basis.
No. Shared Ownership does not mean you share the ownership of the property, or have to live with another person. It means you own a share of the property and pay rent on the share you don’t own to a housing association. Buying a house with friends, a spouse or a partner is known as joint ownership.
There is no longer a restriction on the number of bedrooms within the property you wish to buy. Previously Shared Ownership purchasers were eligible to apply for properties with up to one extra bedroom than the household size required. Now, as long as you can afford it, you can apply for properties with as many bedrooms as you wish.
Resales are Shared Ownership properties where the current owner is selling their share. Unless they are ‘fixed equity’, you purchase the share on offer and can choose to purchase additional shares in the future (via a process known as staircasing) until you own the property outright.
Generally speaking, the minimum share is available to purchase in a new build Shared Ownership property is 25%, and the maximum share is 75%. However, this may vary depending on the housing association. Your income and savings will be assessed by an independent financial advisor to determine what size share is affordable for you. So, the minimum share available may be set to 30% by the housing association, but if it is affordable you could purchase a 40%/50% etc share.
With resale properties, however, the minimum share will be whatever the seller has purchased previously. So, if the seller had a 70% share in their Shared Ownership property, the minimum share you can purchase will be 70%.
You can get help from another scheme called ‘Older People’s Shared Ownership’ if you’re aged 55 or over. It works in the same way as the general Shared Ownership scheme, but you can only buy up to 75% of your home. Once you own 75% you won’t have to pay rent on the remaining share. You can search for these particular homes on Share to Buy by filtering your property search to show ‘Over 55’s Shared Ownership’.
The process of purchasing a new-build property depends on a number of factors, such as the length of time required to arrange mortgage financing and the speed at which the solicitors involved can process the sale. Usually it takes around two months from start to finish, however it can take as little as 28 days if everything proceeds quickly. Although, if building work has yet to be completed on the development this may lengthen the process.
The Shared Ownership lease sets out the rights and obligations of both the landlord (i.e. the housing association) and tenant (i.e. the shared owner). The housing association has a contractual right to ensure that the shared owner complies with the terms of the lease. A Shared Ownership lease is where the leaseholder has purchased a share in the equity and pays rent on that share retained by the landlord.
Typically a Shared Ownership leaseholder will own 25%, 50% or 75% of the property and pay rent on that part of the property owned by the landlord. The actual proportion owned by the leaseholder and the landlord can vary from the examples above.
Yes. This is called staircasing. You should check with your housing provider as to the specific terms of staircasing arrangements for the home you intend to buy. Normally, you will be able to staircase as and when you can afford to in a minimum of 10% tranches.
You can staircase to the point that you own outright. The price of the additional share being bought when you staircase will be based on the value of your home at the time you want to staircase.
You should check with your housing provider as to the specific terms of staircasing arrangements for the home you intend to buy. Normally, you will be able to staircase as and when you can afford to in a minimum of 10% tranches. In most cases you will be able to staircase all the way to 100%, but you should check your lease before purchasing, as some agreements cap the share at which you can staircase to.
As long as you can show at least three years of self-employed accounts, you should be able to obtain a mortgage (providing your income is sufficient, of course). You should seek independent financial advice about suitable mortgages and about managing the ongoing costs of home ownership if your income varies from year to year.
Yes, if you are looking to purchase a Shared Ownership property in England (with the exception of London) the maximum household income is £80,000. In London, the maximum household income is £90,000 per annum.The maximum household income is the income of any member of the household involved in the purchase (i.e. if you are buying with a partner, the household income would include both your salaries and any other income you receive)
There is no set minimum income allowance for Shared Ownership. Each property will have its own valuation and the housing association will determine the minimum income required for that property to be affordable to people earning under the maximum allowance threshold. If you have a large amount of cash to put down on a property this may make the minimum income more affordable.
If you are able to demonstrate that you can get a mortgage and maintain the payments, you may be able to buy through Shared Ownership. You will have to undergo a financial assessment with a financial advisor working with the housing association you buy through to assess this.
Some lenders will allow EU/EEA residents to have a minimum 2 years UK address history. If you are a non EU/EEA citizen, then lenders will require a full 3 year UK address history.
Benefits will not be included as income when assessing your affordability, therefore it is unlikely you will be accepted for a Shared Ownership property or be able to find a mortgage.
In order to buy you will need to be able to take out a mortgage. If your credit history stops you from doing this, then you will not be able to proceed. Before renting a property to you, housing associations will run a credit check. In some cases they will not allow you to rent the property if you have bad credit, so it is worth asking them about their policy before you view the property.
If you already own a home, then you will not be eligible to purchase a Shared Ownership home.
If your home is currently up for sale and you wish to purchase a Shared Ownership home, you will need to show that your current property is unsuitable for you. You will need to obtain written support for your application from your Council. The housing provider you are buying through will help you obtain this support and they will keep this on your file.
Existing home owners must have sold the property, or had their name removed from the mortgage, before they can exchange contracts on a property bought through Shared Ownership, or they sign a rental agreement for an affordable rental property.
Rooftop Housing Group will carry out an assessment based on the household income and if your joint income is above the threshold, it is unlikely you will be accepted on to the scheme. You may be able to and a mortgage based on just one of your earnings, but in that case the lender would only accept one of your names put on the lease.
You may be able to apply for a mortgage, but you will need to demonstrate that you have a least two years remaining on your visa and have a deposit of 25% of the share or three years remaining on your visa and a deposit of 20% of the share. If you are able to demonstrate that you can get a mortgage and maintain the payments, you may be able to buy through Shared Ownership. You will have to undergo a financial assessment with a financial advisor working with the housing association you buy through to assess this.
All repairs and maintenance to the home are your responsibility, regardless of the share you own. Most brand new homes come with a one year warranty period for defects and a longer warranty to cover any structural problems caused by poor workmanship. The housing provider you buy from can explain the warranties available on the home you want to buy.
When you buy a flat, we will generally be responsible for any communal parts of the building and grounds and you will be responsible for all repairs and maintenance to your own flat. You pay a service charge to the housing provider which is used to cover the costs of maintenance and decoration to communal areas.
You are free to decorate your Shared Ownership property as you wish, however, Rooftop Housing Group will not contribute to decorative improvements. Your Shared Ownership lease should have details about major alterations to the property, e.g. new flooring, structural changes, which will have to be authorised by Rooftop before work commences.
You should check the terms of your lease. You must Rooftop's permission in writing before you make any alterations to your property. However, they should not be able to withhold permission unreasonably.
Shared Ownership leases do not allow you to sublet your home. This may also be a condition of the mortgage. In some cases, under exceptional circumstances, you may be able to sublet for a specified period. You will be required to obtain written permission from Rooftop Housing Group.
If you intend to take a lodger, you should check with us, but most Shared Ownership leases allow this.
Please note, the income you will gain from taking a lodger will not be taken into account when assessing your affordability for a property, you must be able to afford to purchase the property and make the monthly costs independently of the income from a lodger.
Shared Owner FAQs
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