Shared

Ownership

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%.

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.

What are the eligibility rules for Shared Ownership?

If you have non-dependent adults living with you (such as children 18 and over) this can affect your benefits.  

 

The Department for Work and Pensions or local authority will look at the income of each adult in your household as this affects which deduction they take.

Frequently asked questions

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Loan Sharks

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?

Speak in confidence to one of our Money Advisors, or contact the Illegal Money Team available 24/7 on 0300 555 2222 for anonymous information taken in the strictest of confidence.

Interested? Want to know more? 

The Money Advice Service website has further information on all of the above.

 

Please contact us if you would like an appointment to see us or if you would like advice via email

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