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.
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.
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%.
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.
When do I buy when I part-buy/part-rent my home?
Effectively you are buying a leasehold house or flat. that may be either new or a resale. However, as you cannot presently afford to purchase outright, you are paying rent on the portion that you cannot afford.
You have the option to buy further shares, up to and including 100% ownership when you are able to do so.
The price of buying further shares 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:
Be very careful about borrowing money or accepting goods from anyone not authorised by the Financial Conduct Authority. They often charge very high interest rates and demand unaffordable repayments. Lenders such as these are known as Loan Sharks.
NOT SURE WHAT A LOAN SHARK IS?
If you can answer yes to one or more of these questions you might be borrowing from a loan shark:
Did they offer you a cash loan?
Did they not give you paperwork?
Did they add huge amounts of interest or APR to your loan?
Have they threatened you?
Are you scared of people finding out?
Have they taken your bank card, benefit card, passport, watch or other valuables from you?