FAQ

Shared Ownership

What Is Shared Ownership?

Shared ownership is a part-buy part- rent government funded scheme designed to help people on moderate incomes get on the property ladder. The scheme is simple - you typically buy an affordable share of the property’s full value and pay a subsidised rent on the remainder, with an option to purchase further shares later on.

What Monthly Costs Can I Expect?

In addition to your rent and mortgage repayments, you will pay a service charge. This will cover a variety of costs related to the management of the building, for example insurance, management fees, repairs, utilities and servicing. It will also include a contribution into a reserve fund that will be used to pay towards future major works and external decorations.

Who Is Eligible?

Priority for a Shared Ownership home differs, priority is usually given to those living or working in the borough of the development.

What Costs Are Involved in Buying a Shared Ownership Property?

In addition to the money you will need to put towards your deposit, you will need money kept aside for the cost of solicitor fees and mortgage arrangement fees.

How Much Deposit Will I Need?

For a deposit, you are likely to need to raise between 10% and 15% of the share you are buying. You’ll also need money kept aside to cover solicitor fees and other costs, as mentioned above. You will then need to take out a mortgage from a bank or building society to pay for the rest of your share.

How Long Does It Take to Buy?

The process of buying a new-build property depends on several factors, including the length of time required to arrange a mortgage and the speed at which the solicitors can process the sale. This typically takes around two months, but can take as little as 28 days if everything proceeds quickly. It is worth noting that buying a property that is not yet built or completed can be a longer process.

How Many Bedrooms Am I Entitled to?

Priority will be given to those living or working in the borough. Please note existing local government criteria means that applicants will only be put forward for properties according to their immediate bedroom need.

What Size Share Can I Buy, Can I Buy 100% Straight Away?

You are unable to buy 100% of a shared ownership property straight away. If you can afford to do so, you should look at private sale on the open market. Most shared ownership leases will allow you to buy 100% of the property over time - this is called staircasing.

To Whom Do I Pay the Rental Costs?

You pay rent to the housing association or the private developer that built the property. The amount you pay depends on the size of the share you purchase and is generally set at a lower rate than private rental costs.

What Is a Service Charge?

Service charges are payments by the homeowner to the housing association or management company for the services they provide. These include maintenance and repairs to common parts, insurance to the building and occasionally the provision of lifts, communal lighting and door entry systems. Service charges can vary from year to year, with specific details set out in your lease. Please note your service charge is likely to increase in year two.

What Is the Maximum Income Allowance for Shared Ownership?

In London, the maximum household income to buy a shared ownership property is £90,000.

We Have Our Own Mortgage Provider, However Would We Still Need to Complete the Financial Assessment Online?

The initial financial assessment will need to be undertaken by the chosen intermediary – if you decided to reserve and proceed you are more than welcome to use your own broker.

What if I Need to Move but Cannot Sell – Can I Sublet?

You may have seen stories in the press recently about shared owners who need to move due to personal / professional circumstances and - unable to sell their property - end up paying for an empty Shared Ownership home whilst renting elsewhere.

In practice, if you find you need to move to a different property and don't wish to continue to pay for a property standing empty you have two options: staircase to 100% after which subletting restrictions don't apply, try to sell your shared ownership property, or ask for a permission to sublet.

Once you've staircased to 100% you own the property outright and can sublet it to whomever you wish. You'll still need to inform your housing association as well as your mortgage provider as this will change the terms of your mortgage.

You'll also need to look into taking out appropriate insurance to provide enough cover for you and your tenants.

Selling your Shared Ownership property is not half as difficult as some journalists would have you believe - especially in London where the property market is particularly robust.

As a shared owner, you will be obliged to give the housing association you bought your home from a minimum of eight weeks to try to sell your home. This is because your Shared Ownership home came from affordable housing stock and it's important that it gets passed on to somebody who is also eligible for the Shared Ownership scheme.

Are We Able to Redecorate Freely? For Example, Paint Walls, Hang Shelves, Install Curtain Rails and TV Brackets?

Yes, in most cases you are, unless stipulated in your lease agreement.

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