It is sometimes very difficult for people to get on the housing ladder, mainly due to high prices or high mortgage interest rates. Our specialist in shared ownership matters, Senior Licensed Conveyancer, Verity Donaldson, knows only too well how difficult it can be as she found herself in the same position a few years ago. In this article, Verity explains more about shared ownership including what it is and who is eligible.
Shared ownership is a government scheme that offers you the chance to buy a share of a property from a Housing Association. When you buy a shared ownership property, you decide what percentage of the property you can afford to buy from the Housing Association. You put down a deposit and take out a mortgage to cover the rest. You then pay rent on the part you do not own together with a maintenance service charge. If you are able to buy a shared ownership house then sometimes the service charge is just the buildings insurance. Because you only own a part of the property, you can buy it with a smaller deposit and mortgage. You can buy a new-build property or an existing property (flat or house) through the shared ownership resale scheme.
For a new build property you can purchase between 10% and 75% of the home’s full market value. If you purchase an existing home then you would buy the existing share the seller owns although you can purchase a further share from the Housing Association if you wish.
In order to be eligible to purchase a shared ownership property then your household income must be £80,000 a year or less (£90,000 a year or less in London) and you cannot afford all of the deposit and mortgage payments for a home that meets your needs. You must also either be a first time buyer, someone who 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 are an existing shared owner and you want to move or you own a home and want to move but cannot afford a new home that meets your need. 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.
You can purchase more shares in the future after you buy your first home, if you wish. The higher percentage share that you own, the less rent you will pay.
If you decide to buy the property outright then this is called final staircasing. Once you final staircase a shared ownership house then you would no longer pay any rent or service charge to your Housing Association. Once you final staircase a shared ownership flat then you would no longer pay rent but the Housing Association would still be your landlord and you would carry on paying the service charge to them.
If you are looking to sell or buy a shared ownership property or you wish to purchase more shares or final staircase the property you own then please get in touch with Verity Donaldson who specialises in shared ownership matters.
Please telephone 01732 460565 or email enquiries@berryandlamberts.co.uk for more information.
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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
