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Shared Ownership
Shared Ownership is a Help to Buy Scheme and one of the new modern approaches to getting onto the property ladder. It was made to help first time buyers who were struggling to save for a large deposit. Here at Choice mortgage Centre have years experience of helping mortgage applicants with this scheme and have in-depth knowledge of the scheme requirements and criteria.
Shared Ownership offers you the chance to buy a share of a property from a housing association, a non-profit-making body that provides homes. Shared Ownership is an affordable way to take the first steps on the home ownership ladder. It is aimed at local people, who would like to own their own home but who are unable to afford to purchase a property outright. It is a form of leasehold tenancy. Because you only own a part of the property, you can buy it with a smaller deposit and mortgage. A smaller mortgage means smaller repayments but you’ll also need to pay:
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rent on the share of the property you do not yet own
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monthly service charges
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ground rent.
Shared Ownership homes can be new builds, existing properties, houses or flats. All Shared Ownership properties are leasehold, even houses, which is unusual. To be eligible for Shared Ownership you need to:
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be a first-time buyer, an existing shared ownership homeowner, or a former homeowner who can't afford to buy now
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be over 18 years old
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have an annual household income of less than £80,000 (£90,000 in London).
How Does it Work?
When you buy a Shared Ownership home, you decide what stake in the property you can afford to buy from the housing association. You put down a deposit of at least 5% of your stake and take out a mortgage to cover the rest. You then pay rent on the part you do not own. You can increase the share you own in the property, through a process known as staircasing, until you own 75% of the property, or in some cases 100%. Not all housing associations let you get to 100%, so be sure to check first.
There’s a legal cost every time you staircase so it may make sense to buy bigger chunks. Plus, some housing associations have a limit on how many times you can do it. The best way to check if a home qualifies for the new version is to ask the provider when you make an enquiry. Head hurting? Please give us a call for more information and guidance!