Shared Ownership Properties
Shared ownership information is provided by Share to buy ltd.
Shared ownership homes offer a low cost way to get on the home ownership ladder. Shared ownership makes housing affordable.
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Share to buy attend Parliamentary discussion on innovation in home ownership
14th May 2013
Today Share to buy’s Director James Cartlidge attended a Parliamentary round table discussion - Delivering innovation in Home Ownership: The role of Home Purchase Plans.
Share to Buy Nominated at Broadway 10th Anniversary Awards
10th May 2013
Share to buy were last night nominated for two awards at Broadway’s 10th Anniversary Awards in London. The awards, hosted by Channel 4 property expert Phil Spencer, celebrated the organisations and individuals who have risen to ‘the challenge’ of fundraising for Broadway, a charity which aims to end homelessness for all.
Shared Ownership housing: key things to know
Shared-ownership gives you the chance to buy a percentage share of a new build property, and you rent the remaining share from a housing association. This makes home ownership more affordable as it reduces the amount required for a deposit, and you only pay the mortgage on the share you own.
In England, Shared Ownership is a Help to Buy scheme, with the exception of London, in which it is a FIRST STEPS scheme. Help to Buy is the brand for the government funded initiative of affordable home ownership schemes designed to help people who cannot afford to buy a home that suits the needs of their household.
Over the years several scheme names have been used (i.e. part buy/part rent) but the current Help to Buy schemes are ‘Equity Loans’ and ‘Shared Ownership’.
The Homes and Communities Agency (HCA) have appointed 15 Local Help to Buy Agents providing coverage across England. The Local Help to Buy Agent is there to guide you through the options available via Help to Buy and explain the eligibility and affordability criteria.
In London, the Help to Buy Agent is called FIRST STEPS and is managed in partnership between the Greater London Authority and online property portal Share to buy (www.sharetobuy.com/london).
Find shared ownership homes with Share to buy
Sharetobuy.com provides a property portal where you can search for shared ownership properties and also offers a shared ownership mortgage price comparison site - including 5% and other low deposit mortgage options.
- To find out about shared-ownership and equity loans in your local area, please visit www.sharetobuy.com where you can find a beginners' guide to shared ownership schemes as well as part buy part rent and shared equity properties in your area.
- For information on shared ownership mortgages, go to our mortgages page or visit Share to buy's shared ownership mortgage calculator to see how much you can borrow. The calculator uses daily updated shared ownership mortgage rates to provide a robust estimate of how much a shared ownership mortgage might cost (though please note that we have now updated the calculator and it leads directly to a price comparison site for shared ownership mortgages). Finally, you can also find details of shared ownership solicitors.
About Shared Ownership
Shared-ownership is a great way into home ownership and is the main affordable housing scheme in England. Shared ownership gives first time buyers a chance to purchase a new build property without the need to amass the kind of large deposit often required on the open market.
With the shared ownership scheme, you buy a percentage share in your home (anything from 25% - 75%). You pay rent to the housing provider on the share that you don't buy. The bigger the share that you purchase, the less rent you will pay. The shared ownership properties displayed at sharetobuy.com show you how the rent changes when you vary the size of the share (unless it's a resale in which case the share available is fixed).
When you can afford to do so, you can buy more shares until you own your home outright in a process known as 'staircasing'. There is no obligation to staircase should you not wish to, the choice is entirely yours. If you already own a shared ownership house or flat and are looking to staircase to a higher share, or even full ownership, contact the Share to buy mortgage team for more information on staircasing and remortgaging, or use Share to buy's staircasing calculator.
This website, www.shared-ownership.org.uk, provides general information on shared ownership housing. For details of available shared ownership housing, including shared ownership flats and shared ownership houses, in your area, please visit www.sharetobuy.com.
Shared Ownership in London (FIRST STEPS)
FIRST STEPS is the Help to Buy Agent in London, and is the Mayor of London’s affordable homeownership scheme. FIRST STEPS is managed in partnership with Share to buy, and all available shared ownership and intermediate rent properties are advertised on www.sharetobuy.com/london.
House prices in the capital are traditionally higher than in other parts of the county, and as such many first time buyers find it difficult to save the tens of thousands of pounds required for an outright sale deposit. Therefore, shared ownership is very popular in London, as it reduces the amount required for a deposit. Many housing providers are building shared ownership homes in London, and there is also a healthy resales market.
The property search on the Share to buy website makes it easy to find shared ownership properties in the capital.
Eligibility
Shared ownership housing schemes are government funded, and as such there are specific criteria and eligibility rules which govern who can purchase these homes. Previously, shared ownership was targeted at key workers, but now the scheme is open to all those that meet the eligibility criteria and can afford to purchase a shared ownership home.
To be eligible to purchase a Help to Buy shared ownership home you must meet the following criteria:
- Your household income must be under £60,000 per year (in London £66,000 for 1 to 2 bed and £80,000 for a 3+ bed property).
- You must also be able to demonstrate that you do not have adverse credit history and can afford to sustain the costs involved in buying or renting a home
- You must show that you are not in mortgage or rent arrears, or in breach of your current tenancy agreement at the time of application
- You must not already own a home in the UK or abroad (except in very exceptional circumstances – check with local Help to Buy Agent)
There is high demand for Help to Buy - shared ownership options which means that applicants must be prioritised. Priority is given in the following order:
- Existing social tenants and serving military personnel.
- Locally determined priorities - Local authorities are able to choose priority applicant groups for affordable home ownership according to the specific needs of their locality. The Help to Buy Agent covering the local area will be able to advise what, if any, local priorities the local authority has set.
- Other first time buyers who fit all other qualifying criteria detailed above
Housing providers do not often receive enough applications from social housing tenants and military personnel to fill their available developments, so do not let the priorities put you off enquiring about properties. You can contact the housing providers directly via Share to buy once you have registered at https://www.sharetobuy.com/register
From time to time shared ownership schemes targeted at specific groups are available, such as shared ownership for disabled people and those over 55 years old. Check www.sharetobuy.com for the latest shared ownership schemes.
Shared ownership mortgages
Share to buy are experts in shared ownership mortgages, contact our mortgage team directly for information on the best mortgage for you. There is also a mortgage comparison tool on the Share to buy website and Facebook users can access Share to buy's shared ownership mortgage calculator.
Resales
Existing shared ownership properties regularly come back to market when the home owner is ready to move on elsewhere. When any existing part buy / part rent home becomes available for resale, you can buy the share from its current owner. The homes vary greatly in terms of age, size and type. Resales properties are available on Share to buy.
Repairs
The shared home ownership lease between you and the housing association will set out your rights and responsibilities as a shared owner. Although you have not bought the property outright, you will generally have the normal rights and responsibilities of a full owner-occupier. In particular, you will generally be responsible for the cost of repair and maintenance to your home, paid through a monthly fee known as a 'service charge'. Take care when researching shared ownership properties for sale to ask how much the service charge is, as well as the rent. Arrangements may be different on FirstBuy, Homebuy Direct and other shared equity schemes with developers.
Shared Equity / Help to Buy Equity Loans
Shared equity is not the same thing as shared ownership. With shared equity, you generally use an 'equity loan' to form part of a deposit but the person buying the home owns the whole property (though the provider of the equity loan usually has an agreement to share in any appreciation). Help to Buy equity loans have replaced previous equity loan schemes including First Buy and Homebuy Direct.
Help to Buy - equity loans makes new build homes available to all home buyers (not just first time buyers) who wish buy a new home, but may be constrained in doing so – for example as a result of deposit requirements – but who could otherwise be expected to sustain a mortgage. Up to a maximum of 20% of the purchase price is available to the buyer through an equity loan funded by the Government through the HCA.
Help to Buy - equity loans is available in England from house builders registered to offer the scheme. Help to Buy will run from April 1st 2013 until March 31st 2016 (or earlier if all of the funding is taken up).
This enables you to take out a mortgage on which you make repayments in the normal way. Your mortgage lender is likely to require that you contribute a deposit and your mortgage and deposit must cover a combined minimum 80% of the total purchase price. The rest of the purchase price will be paid for with an equity loan from the HCA.
As a result of providing this assistance, the HCA has an entitlement to a share of the future sale proceeds equal to the percentage contribution required to assist your purchase.
For the first five years of Help to Buy home ownership there is nothing for you to pay on the amount that the HCA contributed to your purchase.
After five years, the equity loan will be subject to a fee (collected from you on behalf of the HCA by the Post Sales Help to Buy Agent) of 1.75% per annum on the outstanding amount of the equity loan. From the fifth anniversary of the loan this fee will increase each year by the increase (if any) in RPI plus 1%.
Help to Buy equity loan homes are coming soon to www.sharetobuy.com
Intermediate rent
Intermediate rent schemes allow you to rent a new build home at a subsidised rate compared to the private rental market. Typically this subsidy is 20% less than you would expect to pay for a similar home in a similar area on the private market. This gives you the opportunity to put the amount you are saving towards a deposit to purchase a shared ownership home at a later date.
Intermediate rent schemes include Intermediate Market Rent and Rent to Buy. They are great way to start the journey into affordable home ownership and part buy part rent schemes. Intermediate rent properties are listed on https://www.sharetobuy.com/sharedownershipproperty
Questions and answers
What is shared ownership?
Shared ownership was introduced to help people who cannot afford to buy a home outright. Through shared ownership you buy a share of the property and pay a rent on the remaining share you do not own. Gradually you may buy further shares and eventually own your home outright.
What is a housing association?
They are non-profit making organisations who provide and manage homes for rent and sale for people in housing need who cannot afford to rent privately or buy. Most housing associations provide housing with the help of public money given by the Government or a local authority; in some cases, the association may provide housing using its own money.
Who can buy through the shared ownership scheme?
The scheme is intended for people who cannot afford to buy a suitable home in any other way. Shared ownership schemes will vary in their eligibility but generally, priority will normally be given to existing public sector tenants or those on local authority or housing associations' waiting lists.
Although you have not bought the property outright, you will have the normal rights and responsibilities of a full owner-occupier.
You are advised to ask your legal adviser as well as the housing association if there are terms you do not understand.
Can I buy a shared ownership home with someone else?
The term ‘shared ownership’ refers to sharing ownership with a housing association, not another individual. But joint applications are generally fine!!
What kind of property can be bought through shared ownership?
Shared ownership homes may be new or renovated flats or houses which are sold through housing associations. Prices vary according to location but are expected to be within the means of those people who cannot afford the prices of properties available for sale in the open market. Just note that mortgage availability can sometimes be more restricted for shared ownership new build flats than on shared ownership houses or second hand shared ownership properties ('resales').
How does shared ownership work?
The scheme allows you to purchase a share of a property usually from a housing association. The share you purchase is funded by a mortgage which you will need to arrange with a bank or building society. The remaining share you do not own is rented from the housing association.
The size of the share to be purchased will depend on your income and savings and you can buy as little as 25% or as much as 75%. You will also have to pay a service charge when you buy a flat. Later on, if you wish and can afford to do so, you can buy further shares until you own the property outright.
Remember that house prices can go up or down. This means that sometimes you might pay more for buying additional shares or have to sell at a price less than you originally paid. When you purchase through shared ownership, the housing association will grant you a lease which sets out your rights and responsibilities.
What does the shared ownership lease entitle me to?
Whether you buy a house or flat under shared ownership terms, the housing association will grant you a lease usually for a period such as 99 years. It will entitle you to live in your home as an owner-occupier. It will also entitle you to buy further shares in the property and sets out how you can do this. It also states that you can sell your property.
Other points covered in the lease set out your responsibility for repair and payment of rent and service charge. Although you have not bought the property outright, you will have the normal rights and responsibilities of a full owner-occupier.
If you have any questions on how the scheme operates ask the housing association selling the property. You are also advised to take your own legal advice on the terms and conditions of the lease, so please consider obtaining a quote from our shared ownership solicitors
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Shared ownership mortgage calculator
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Share To Buy
We specialise in shared ownership. On our website you can find part buy part rent homes and mortgages!
If you have any difficulties in making payments on your shared ownership mortgage, please contact your mortgage provider or housing association immediately.