If you can’t afford to buy a property outright, you might find that shared-ownership scheme is an attractive alternative way into home ownership. You buy a share of the property and pay rent to a landlord on the rest. You might buy a 25%, 50% or 75% share of the value of your home. You can take out a mortgage to buy your share. You’ll also need to pay a deposit, of usually between 5% and 10% of the share you’re buying. The share you don’t own and what you pay rent for, is usually owned by a housing association. The bigger the share that you purchase, the less rent you have to pay. You can buy more shares in your home in the future. This is known as ‘staircasing’. If you buy more shares, you’ll pay less rent. You will usually pay monthly ground rent and service charges, for example towards the maintenance of communal areas
Homes you can buy through shared ownership
You can buy:
- a new-build home
- an existing home through a shared ownership resale scheme
- a home that meets your specific needs, if you have a long-term disability – for example, a ground floor flat
Shared ownership homes are offered by housing associations, local councils, and other organisations. They are called ‘providers’ or the landlord.
All shared ownership homes (houses and flats) are leasehold properties.
Who can apply?
You can buy a home through shared ownership if both of the following are true:
- your household income is £80,000 a year or less (£90,000 a year or less in London)
- you cannot afford all of the deposit and mortgage payments for a home that meets your needs
One of the following must also be true:
- you’re a first-time buyer
- you used to own a home but cannot afford to buy one now
- you’re forming a new household – for example, after a relationship breakdown
- you’re an existing shared owner, and you want to move
- you own a home and want to move but cannot afford a new home that meets your needs
For some homes you may have to show that you live in, work in, or have a connection to the area where you want to buy the home.
How we can help?
We have plenty of experience in helping our clients purchase shared ownership properties.
We can:
- Advise you on the process that will be involved in applying to purchase a property through the scheme
- Advise you on the most suitable shared ownership mortgage for your situation – as with other mortgages there will be cheaper or more expensive shared ownership mortgage deals available from different lenders
- If your current shared ownership deal is coming to an end, we can advise you on what your next options may be
- If you are considering staircasing, we can advise on what increased percentage you may be able to afford
If you are considering purchasing through the shared ownership scheme or already have a shared ownership property and would like to review your mortgage options, please get in touch and one of our advisers will be able to help.
