Whether you are actively looking for Shared Ownership Properties or you just want to know a little bit more about how it works, we can help.
Shared ownership is a Government Scheme created to help people get on the property ladder. It’s most commonly used by people who may not have managed to save a big enough deposit to look at a standard purchase for 100% of a property.
The scheme is exactly as you’d expect based on it’s name. You buy part of the property & the rest of the property is owned by the Shared Ownership provider or Housing association.
You can buy between 10-75% of the property initially and a lot of schemes allow you to “Staircase” in future to own 100% of the property when it becomes affordable to you. “Staircasing” is the process of buying additional shares in a property you already own part of & is a great way for people to increase the amount of the property they own as their incomes increase over the years, with the ultimate goal of owning 100% of the property, if the scheme allows.
You will get a mortgage for the part you own, & pay rent for the part you don’t own.
For example, if the property is worth £200,000 at full market value and has a rental value of £800, if you buy 50% you would have a mortgage for your part & pay £400 in rent (half of the market value rent) for the part that you don’t own. So you have two outgoing payments, one for your mortgage & one for your rent.
In some circumstances, a select few lenders may allow you to purchase your share with NO DEPOSIT. Criteria varies from lender to lender, but typically required deposits are significantly lower than a standard home purchase due to the lower value of your share.
Additional costs may apply such as a one time reservation fee, as well as ongoing costs such as: management fees, service charges, ground rent or estate charges etc. You should check these fees before putting your reservation fee down. As your mortgage advisor, we’ll need these fees to calculate if the mortgage is affordable for you based on your income, expenditure & the costs of the property.
Shared ownership schemes are offered by local councils & housing associations most commonly & availability can be limited.
Speak To An Advisor
When you express an interest in a Shared Ownership property, the provider will check your eligibility for you & confirm whether or not you’re eligible. If your household income exceeds £80,000, you won’t be eligible. Just like a non shared ownership mortgage, you’ll also need to meet the affordability requirements.
If you own 100% of the property that you once bought as a part of the Shared Ownership scheme, you can usually sell it on the open market through an Estate Agent.
If you don’t own the full 100% you’ll have to first contact the shared ownership provider/landlord who will have first refusal to buy the property from you, or to find a buyer for the property. There is usually a set time period called the ‘nomination period’ where your landlord has to either buy your share back, or find a buyer to buy your share. If they’re unsuccessful, you can then sell your share of the property on the open market.
If the landlord finds a buyer during the nomination period then the maximum you will get for the property is based on the share you own vs the full market value of the property based on a RICS certified Surveyor’s valuation. You are likely to have to pay for the valuation & other sales costs may apply.
If you’re interested in Shared Ownership & want to find out how to get started, Contact us today!
Your home may be repossessed if you do not keep up repayments on your mortgage
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Shared Ownership can be a confusing process without getting the expert help you need. Get in touch to ensure a smooth process
Plura is a trading name of Plura Mortgage Advice Ltd which is an Appointed Representative of PRIMIS Mortgage Network, a trading name of First Complete Ltd. First Complete Ltd is authorised and regulated by the Financial Conduct Authority. Registered Office 25-29 Sandy Way. Yeadon, Leeds, LS19 7EW. Registered in England & Wales with company number 14931418. We charge a fee for Mortgage Advice, usually £395, but this can vary depending on the service you are receiving. We’re also paid commission from the lender
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK
