If you don’t already own a home and can’t afford to borrow or buy a home which is on the market outright, shared ownership is a great opportunity to team up with a local housing association or private owner to get your foot on the property ladder. This makes property ownership more accessible to those under a lower earning bracket.
What is Shared Ownership?
Subject to eligibility, shared ownership involves getting a mortgage (for between 25% and 75%) of the overall cost of a property to essentially buy a stake in that property. To continue buying the home, you will pay monthly rent at a discounted rate to the owner of the building. There are a number of things to consider when entering a shared ownership scheme and each housing association or owner will have different rules and their expectations of you will differ, so it’s a good idea to do your homework in your local area.
Once you have secured your chosen property using this scheme, you can begin to buy more of the home in 10% increments over time (called staircasing) until you eventually own all of the property. The good news is that you won’t become liable for stamp duty until you own 80% of the property and over.
Who is Eligible?
First of all, you need to be a first-time buyer or someone who used to own a home but can’t afford to buy one now. Either way, you mustn’t already be a homeowner. Below are the other rules that apply:
- You must be 18 years of age or over
- You can’t afford to buy a home that suits your needs on the current open market
- You are not in arrears with rent or a previous mortgage
- You must have a good credit rating
- You have an annual household income of below £80,000 outside of London or £90,000 within London.
- You having savings or access to enough money to cover the cost of the deposit for your share of your new home.
Always remember to check if the housing association or private developer have their own rules of eligibility before you proceed with shared ownership.
If you would like to discuss your options or get some of advice from one of our experts, we are happy to help! Please contact us here to book and appointment or call us on - 0115 8969 800