Published 21 Mar 2016

Shared Ownership - The Basics

Here's our guide to Shared Ownership

For some, the dream of getting on the property ladder can sometimes seem a little out of reach. Maybe you don’t bring home a large enough salary or your outgoing costs have made it difficult to save the kind of deposit required to buy. If this sounds familiar, then you will be interested to know that the government have several schemes to help you get your foot in the door.

Shared ownership is when you buy a percentage of a property (typically 25% - 75%) and then pay rent to a housing association on the remaining share. This enables you to borrow significantly less of a mortgage and therefore means the deposit required to secure a property is much lower. You also have the opportunity to purchase greater shares in your property and there is often the potential to staircase to own 100%. 

If you are thinking of going down the shared ownership route then there are a few key things to be aware of:

  • Shared ownership is only available to people who fit the Help to Buy criteria. The first step to determine if you are eligible is by visiting www.helptobuy.gov.uk where you will find information on the various Help to Buy schemes. You must then complete an online application for your area, an email will follow confirming or denying your ability to purchase in this way. 
     
  • There are several restrictions with shared ownership. The number of bedrooms you can apply for is dependent on the amount of people that will be living in the house, for instance a couple with no children can apply for a maximum of two bedrooms. Another element to be aware of is that although you are able to purchase further shares of your property, the process for this is similar to buying a new house. You will likely need to pay further mortgage fees, stamp duty, legal expenses and a valuation fee. 

Providing you fit the eligibility criteria, shared ownership can be a great way to get on the property ladder, but like all things, there are some drawbacks. So if you are considering using the scheme make sure you do your research first so you know exactly what to expect before and after you get that front door key. 

 

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