Shared ownership is a way to purchase property if you can't afford to pay for a mortgage on 100% of a home. In a time when it is a challenge to get on the property ladder, shared ownership has become a good option for some buyers. But what is shared ownership and how does it work in practice? Walton Robinson has assembled this guide to help you:
What is Shared Ownership?
Through Help to Buy, you buy a stake of between 25% and 75% of the property; this is using a deposit and a mortgage. You then pay rent on the remaining share, which is owned by the local housing association. The rent you pay can be up to 3% of the association's share of the value of the property.
When you can afford it, you will be able to purchase a bigger percentage of the property - this is known as 'stair casing'. When you own 100% of the property, you can sell on the property on as your own.
Shared ownership is made possible through local housing associations.
What can be purchased through Shared Ownership?
Shared ownership can be put in place for the purchase of new build properties or older properties through housing association resale programmes.
How does Shared Ownership work?
Shared ownership can be set up through your local housing association.
You will only own the property for a fixed period of time, as dictated by the housing association.
You will need to arrange a mortgage to pay for your share of the home's purchase, or fund it through your private savings.
Who is eligible for Shared Ownership?
If you live in England you may qualify to take part in shared ownership if you meet the following:
- You are a first-time buyer
- You used to own a home but can't afford to buy one alone
- You are part of a Shared Ownership and would like a new home
- Your household earns £80,000 annually or less outside London
- Your household earns £90,000 annually or less inside London
- Military personnel take priority over other groups.
For other authorities, such as Northern Ireland, Wales and Scotland, there will be unique criteria, so get in touch with your local council to find out exactly what your stipulations are.
People with long-term disabilities
If you have a disability, you have access to HOLD which is the Home Ownership for Long-Term Disabilities. This gives you the same access to purchasing any shared ownership property listed with your Housing Association. HOLD is there to help when your requirements aren't met - so if you need a bungalow, or have other needs for the building.
If you are aged 55 or over, you are able to purchase a shared ownership property through the scheme Older People's Shared Ownership.
Still have questions about shared ownership? Contact Walton Robinson for more information on this and other property queries today!