Think there’s no hope of ever getting on the property ladder? Think again. Low income home hunters on the lookout for a permanent pad have a solution – the shared ownership scheme. Also known as low cost home ownership and New Build HomeBuy, this method of property purchasing is ideal for those who can’t afford to buy a property outright.
Wondering what it’s all about and if you can get in on the act? As a starting point, use our guide to shared ownership to find out...
Who is Eligible for Shared Home Ownership Schemes?
To qualify you must fall into one of the categories listed below:
- A council tenant.
- A housing association tenant.
- On the housing register and waiting for a property to rent.
- A first-time buyer unable to afford to purchase a property outright.
- A key worker (teacher, nurse, etc.).
- Your household earns an annual income of £60k a year or less.
What’s involved in Shared Ownership?
The basic idea behind shared ownership housing is for the buyer to purchase a percentage of a leasehold property and pay rent on the remainder. Every scheme differs so you will of course need to check the details for confirmation of exact terms. Some operate on a 60/40 basis, others on a 50/50 and so on. You will need to take out a mortgage to pay for your share. You are then given the opportunity to increase the percentage of your proportion of the property and can increase your share until you own 100% of the property if you wish.
If you are a local authority tenant, you may have access to the Social HomeBuy scheme. This was set up to provide tenants with the opportunity to buy a share of the home they are already inhabiting at a discount. For full information and to check if the offer is available to you, contact the landlord or the relevant HomeBuy agent for your area.
Will I need a Deposit for Shared Ownership?
In the case of first time buyers, the answer to that question is usually yes, to around the tune of 3% of the overall value of the property. However, it’s advisable to check with the relevant HomeBuy agent for exact details.
What about Selling a Shared Ownership Property?
If you own a share, you are entitled to sell at any time, providing you inform the relevant housing association of your plans first in writing. If you own 100% of the property you may sell it but the housing association retains what is called ‘the right of first refusal’ to buy the property back for up to 21 years after you have bought the full share.