Shared Ownership

What is Shared Ownership?

Shared Ownership is a scheme introduced by the Government which allows buyers to purchase a share in a home they would otherwise be unable to afford.

The arrangement is designed to assist those on lower incomes to become homeowners.

The share in a property which buyers can purchase ranges from 25% to 75% and the remaining share of the property is owned by a Housing Association.

The Housing Association (a non-profit organisation who make affordable housing available) collects a rent on the remaining share of the property under its ownership; this rent being a ‘reduced’ rent.

In the future, should owners wish, they have the option to buy larger shares in the property when they are in a financial position to do so. This is known as Staircasing.

The cost of Staircasing will be determined by the current market value of the property at the time of purchasing the additional share. The Housing Association will arrange for an up to date property valuation (the buyer being liable for the valuer’s fee). There may be limits on how many times Staircasing can be done.

The purchase of a share in a property can be funded by way of a mortgage or by a lump sum payment.

The rights granted, rights reserved and any covenants (do’s and don’ts) affecting a property will be the responsibility of the buyer, as with all property purchases.

The tenure for Shared Ownership properties is always Leasehold.

If deciding to sell a Shared Ownership home the Housing Association must first be notified, as they have ‘first refusal’ to purchase the same back. The Housing Association will also have the right to find a buyer for the property.

Benefits of Shared Ownership

1. The opportunity it provides for First Time Buyers and those wanting to own their own homes to move from rented accommodation to get a foot on the property ladder.
2. A smaller mortgage is required and a smaller deposit.
3. You get all the benefits and responsibility of owning your own home but at a reduced price.
4. You have the option to increase your share in the property.

Criteria for Shared Ownership 

To be eligible to purchase a property under the Shared Ownership scheme, you must meet the following criteria:

1. Your household income must be £80,000.00 a year or less.
2. You must be a First Time Buyer or have owned a property previously but be unable to afford one now.
3. You are in a rented Council or Housing Association Property.

Who to contact

To apply for a Shared Ownership Property, visit the Government’s Help to Buy website which will provide you with details of your local Housing Association.

Alternatively, If you would like any further advice or information on Shared Ownership Schemes then please email conveyancing@orj.co.uk or call 01785 223440.