Home Services Mortgages for Shared Ownership

Explore Mortgages for Shared Ownership

We’re here to guide you through your shared ownership purchase! As your experienced broker, we’ll explore our network of lenders to find the right mortgage options for your situation. Let’s make the process smooth and easy, so you can focus on enjoying your new home.

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The Road To Ownership

Exploring Shared Ownership: Your Path to Homeownership

Are you dreaming of owning your own home but finding the property market daunting? Shared ownership could be the solution you’ve been looking for. This innovative approach to homeownership allows you to purchase a share of a property while paying rent on the remaining share. In this article, we will explore what shared ownership is, who it’s for, and the typical eligibility criteria you need to meet.

What is Shared Ownership?

Shared ownership is a government-backed scheme designed to help individuals and families get onto the property ladder, particularly those who may struggle to afford a home outright. With shared ownership, you buy a share of a property (usually between 25% and 75%) and pay rent on the portion that you don’t own. Over time, you have the option to buy additional shares, a process known as “staircasing,” which allows you to eventually own the property outright.

Who is Shared Ownership For?

Shared ownership is aimed at various groups, including first-time buyers, those who have previously owned a home but cannot afford to buy again, and individuals with a household income below a certain threshold. It’s an excellent option for those looking for a more affordable way to enter the housing market without the hefty deposit typically required for full home ownership.

Eligibility Criteria for Shared Ownership

To qualify for a shared ownership scheme, you typically need to meet certain eligibility criteria, which can vary slightly depending on the housing association or developer. Here are the common requirements:

Income Threshold:

Most schemes require that your household income does not exceed £80,000 per year (£90,000 in London). This limit ensures that the scheme assists those who truly need financial support in purchasing a home.

First-Time Buyer Status:

Generally, shared ownership is aimed at first-time buyers. However, individuals who have previously owned a home but cannot afford to buy again may also qualify.

Affordability Assessment:

You will need to undergo an affordability assessment to determine how much you can afford to pay for a share of the property and the associated rent. Lenders will consider your income, existing debts, and monthly expenses during this process.

Property Type:

Shared ownership is typically available for new-build properties, but some schemes may also include existing homes. It’s essential to check with the specific housing association to understand the options available.

Local Connection:

Some housing associations may require a local connection to the area where you want to purchase a property. This means you may need to live or work in the local vicinity to qualify.

The Shared Ownership Process

The shared ownership process typically involves the following steps:

1.) Find a Suitable Property:

Start by researching housing associations and developers offering shared ownership properties in your desired area.

2.) Apply for a Shared Ownership Scheme:

Once you’ve identified a property, you’ll need to submit an application to the housing association. They will assess your eligibility based on the criteria mentioned above.

3.) Secure a Mortgage:

After receiving approval, you will need to secure a mortgage for the share of the property you wish to purchase. It’s advisable to seek advice from a mortgage broker to find the right deal for your circumstances.

4.) Complete the Purchase:

Once your mortgage is in place, you can proceed to complete the purchase, which will involve legal processes similar to a traditional home purchase.

5.) Move In and Enjoy Your New Home:

After completing the purchase, you can move into your new home and begin your journey as a homeowner!

The 4 Steps To Home Ownership

Initial Consultation

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Personalised Guideance

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A New Beginning

With your mortgage approved, you’re ready to start your journey to home ownership!

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FAQs

Frequently Asked Questions

Shared ownership is a government-backed scheme that allows you to buy a share of a property (usually between 25% and 75%) and pay rent on the remaining share. This makes it a more affordable way to get onto the property ladder, especially for first-time buyers.

To qualify for shared ownership, you typically need to be a first-time buyer, have a household income of less than £80,000 (£90,000 in London), and be unable to buy a home on the open market. Each housing association may have specific criteria, so it’s essential to check their requirements.

In addition to your mortgage on the share you purchase, you’ll also pay rent on the remaining share and service charges for maintenance and management of the property. Be sure to budget for these ongoing costs when considering shared ownership.

Yes, you can purchase additional shares in your shared ownership property in a process known as “staircasing.” This allows you to gradually increase your ownership stake and reduce the amount of rent you pay, eventually allowing you to own the property outright if you choose.

The main advantages of shared ownership include lower upfront costs and the opportunity to get onto the property ladder. However, potential downsides include ongoing rent payments, limitations on selling your share, and the possibility of service charges that can increase over time.

To apply for shared ownership, start by contacting a housing association in your desired area. They’ll guide you through the application process, which usually involves an assessment of your finances and eligibility for the scheme.