Shared Ownership

A high-level overview

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What is Shared Ownership?

Shared ownership is a government scheme run in conjunction with housing associations aimed at helping people get on to the property ladder, in particular first time buyers who are unable to afford to purchase 100% of a property.  It is one of two schemes under the Help to Buy branding. The other is Help to Buy – which offers Equity Loans to support the purchase of newly built homes from participating builders.  You can read more about the Help To Buy scheme here.

How does it work? 

If you don’t have the deposit you need or can’t afford the mortgage on 100% of a home, the Help to Buy: Shared Ownership scheme offers you the chance to buy a share of your home (between 25% and 75% of the home’s value) and pay rent on the remaining share to a local housing association.

Who qualifies for shared ownership?

You could buy a home through Help to Buy: Shared Ownership in England if:

  • Your household earns £80,000 a year or less outside London, or your household earns £90,000 a year or less in London
  • You are a first-time buyer, you used to own a home but can’t afford to buy one now or are an existing shared owner looking to move.    

With Help to Buy: Shared Ownership you can buy a newly built home or an existing one through resale programmes from housing associations. You’ll need to take out a mortgage to pay for your share of the home’s purchase price, or fund this through your savings. Shared Ownership properties are always leasehold.

What is the process for obtaining a Shared Ownership property?

Your local Help to Buy agent can guide you through the options available and explain the eligibility and affordability criteria.  You can find your local Help To Buy agent by visiting this website.  Once you have found a property the Help to Buy agents will undertake an initial headline eligibility assessment at the application stage to ascertain the maximum share that an applicant could afford and whether they could sustain home ownership in the long term.

Can I ever increase the share of the home at a future date?

You will be able to buy further shares in your home using a process called “staircasing”. The amount you will pay for the new share will be based on the value of your home at the time.

Can I sell my home?

Once you own 100% of your home you will be able to sell it yourself but the housing association involved will have first refusal to buy back the property for the first 21 years following purchase. If you don’t own 100% the housing association will usually have the right to find its own buyer.

Why is it important to use a mortgage broker?

On a Shared Ownership the amount available to borrow will depend on the amount you can afford to repay each month. Due to the rental payment alongside your mortgage payment that you will need to make, the amount available to borrow on a more can be significantly reduced. It is therefore important that you have the right mortgage lender for your circumstances ensuring you can borrow the amount required.

Summary

Shared ownership schemes offer a fantastic way to get on the property ladder if you can’t afford to buy 100% of a property.

Bennison Brown will advise you on your purchase to make things as simple as possible and find and arrange the right mortgage for you.


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Bennison Brown Mortgages

149c Manchester Road, London

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