Expert advice whatever your home ownership journey.
Shared Ownership properties are always leasehold flats or houses and are provided by housing associations.
You go into partnership with the housing association buying a share in a property (between 10-75%) and paying rent on the rest.
The housing association continues to own the remaining share of the property and you pay rent on that remaining share of the property.
The housing association charge a fixed amount of rent based on the value of the property, subject to a maximum of 3%. Shared Ownership can be much cheaper than privately renting. You can sell your share of the property at any time.
Purchase Price: £150,000
Your 40% share in the property: £60,000
Rent: You would then pay the rent on the remaining £90,000 at a maximum rate of 3%. There fore, the maximum your rent would be is £2,700/year or £225/month.
If your household income is less than £80,000 a year (£90,000 in London) then you are eligible to apply for a Shared Ownership home.
You can apply if you have owned a property before but cannot afford to buy one again, however first time buyers are more likely to be accepted.
Shared Ownership is a good idea if you want to own a home, but you do not have the funds to buy a property outright. You will have security knowing that as long as you pay your rent and mortgage repayments you can continue to live in the property. It is also generally cheaper than private renting.
Shared Ownership properties are limited. An online check with your local Help to Buy Agent will show if shared ownership properties are available in your preferred location. You should also check whether local residents who already live in the area have priority for the Shared Ownership properties as this can be the case in rural locations.
You will still need both a deposit and a mortgage to buy into a Shared Ownership property.
As well as the usual considerations when buying a house, there are matters specific to Shared Ownership which you need to think about:
Staircasing is useful as it will also decrease the rent payable to the housing association and increase your share in Your home.
You will have to purchase at least 10% each time you staircase, although this does vary.
Yes, however, the housing association has the right to purchase it first or find a buyer for your home who is eligible for Shared Ownership. The “pool” of potential buyers can be limited.
The sale price will be based on the valuation of your property at the time you sell and the percentage you own.
For example, if you own 50% of your property and the market value at the time of sale is £180,000, then the sale price for your share will be £90,000.
The proceeds of sale (after paying off your mortgage, legal and estate agent fees etc.) will go to you as the seller.
If you own 100% of the property you can sell it yourself. However, you should check your deeds to see whether there are any requirements in relation to selling within the first few years of staircasing to 100%.
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