As property prices have continued to increase on average during the last several decades, it has become harder and harder for some people to be able to buy a property. This is even more so in the major cities such as London, Birmingham and Manchester.
Most people are not aware that they may be able to purchase the property under the shared ownership scheme. There are certain criteria which apply but if you are able to meet them, it is surprising the choice that is offered to you in relation to property.
AREAS OF PRACTICE
Buying through shared ownership
The shared ownership scheme allows you to purchase the property through a housing association. Ordinarily, you would buy a share of the property between 25% and 75% and for the remainder of the value of the property, you pay rent to the housing association. It does not matter how your share of the property is made up. For example, most people purchase their share of the combination of a cash deposit and mortgage.
Once you have purchased a property under the scheme, you would usually have regular monthly payments which include your mortgage repayment, the rent payable to the housing association and service charges for the property. Most websites that offer such properties for sale have helpful calculators to show you if you would be able to afford the monthly repayments once you have purchased the property.
Eligibility for the scheme does depend on the country in which you live. It is always helpful to check the specific criteria of the area in which you intend to purchase the property. Eligibility for the scheme does depend on the country in which you live. It is always helpful to check the specific criteria of the area in which you intend to purchase the property.
You can buy a home through shared ownership if your household earns £80,000 a year or less (or £90,000 a year or less in London) and any of the following apply:
» You’re a first-time buyer
» You used to own a home, but can’t afford to buy one
» You’re an existing shared owner
Shared ownership properties are always leasehold.
The shared ownership scheme is not just open to first-time buyers or younger buyers. It is also open to older people. If you’re aged 55 or over you can buy up to 75% of your home through the Older People’s Shared Ownership (OPSO) scheme. Once you own 75% you won’t pay rent on the rest.
There is also special provision for disabled people. You can apply for a scheme called home ownership for people with a long-term disability (HOLD) if other Help to Buy scheme properties don’t meet your needs, for example you need a ground-floor property. With this scheme you can buy up to 25% of your home.
If you’re disabled you can also apply for the general shared ownership scheme and own up to 75% of your home.
Buying more shares
You can buy more of your home after you become the owner. This is known as ‘staircasing’. The cost of your new share will depend on how much your home is worth when you want to buy the share. You can buy more of your home after you become the owner. This is known as ‘staircasing’. The cost of your new share will depend on how much your home is worth when you want to buy the share.
It will cost:
» More than your first share if property prices in your
area have gone up
» Less than your first share if property prices in your
area have gone down
» The housing association will get your property
valued and let you know the cost of your new share.
You’ll have to pay the valuer’s fee.
Selling your home
If you own a share of your home, the housing association has the right to buy it first. This is known as ‘first refusal’. The housing association also has the right to find a buyer for your home.
If you own 100% of your home, you can sell it yourself.