Am I eligible for shared ownership?
You can apply for shared ownership if you have a household income of less than £80,000 per year (£90,000 in London).
You need to demonstrate that you can't afford to buy a home on the open market, have a good credit rating and having enough savings to cover the legal costs of buying a home and the deposit.
If you are a current home owner you will need to have sold your existing home before you can apply.
Are there any local eligibility requirements?
Some housing developments have a planning condition attached to them which means priority must be given to people who meet certain criteria or have a local connection to where the homes are located.
How can I apply?
This will depend on the housing association but most will require you to complete a formal application process. Sometimes you might find that there is more than one applicant for each property and the housing association should explain to you how they have given priority to one applicant over another.
Who or what is the Help to Buy Agent?
The Government has appointed regional Help to Buy Agents to promote affordable home ownership products. Some housing associations will require you to register with the Help to Buy Agent before they will consider an application from you. Being registered with the Help to Buy Agent does not mean you have been approved to buy a shared ownership home.
What size of property can I buy?
There are no specific criteria relating to your household size and the size of property you can buy. However, housing associations may give priority to applicants who are fully occupying a home over those who would be under-occupying.
What security of tenure do I have?
The share you buy will be granted to you on a leasehold basis. If you are buying a new property this lease will usually last 99 or 125 years. If you buy a second hand shared ownership home you will need to check how long the lease has left to run.
What share can I buy?
This will depend on your financial circumstances. Note that you are expected to buy the largest share you can reasonably afford.
The minimum share is usually 25% and the maximum 75%. When deciding whether to build a scheme the housing association will assume an average share size sold so this will impact on the minimum share they are prepared to sell.
How much rent will I pay?
This depends on the value of the home and the size of share you are buying. The annual rent is usually set at 2.75% of the value of the share you do not own.
Will I need a mortgage?
Yes, unless you have enough savings to pay for all of the share or you are being gifted these funds. You will need to provide evidence of these savings or the gift.
Where can I get a mortgage?
Most, but not all, mortgage providers will lend on shared ownership and they will all have their own policies on the terms of these mortgages. We recommend you get independent financial advice to ensure you get the most suitable product for your circumstances.
Remember that when calculating how much they will lend you the mortgage advisor will take into account the amount of rent you will be paying on the share you do not buy.
Will I need a deposit?
Yes. If you need a mortgage you will need to pay a deposit. The level of deposit will depend on your mortgage provider and can range from 5% to 20% of the value of the share you are buying.
What other regular charges will I have to pay?
This can vary so you need to check before you buy if there are separate charges to cover the cost of communal services, buildings insurance and management of your lease.
Do I need to pay a reservation fee?
Once you have been approved by a housing association to buy a home they will ask you to pay a reservation fee. The amount you need to pay and the terms will vary, so you should always check if it is refundable or not.
Will I need a solicitor or legal conveyancer?
Yes. We always recommend that you use a solicitor who understands shared ownership leases. The housing association will set a target date for exchange of contracts and completion so you need to be sure that the solicitor can meet these targets.
We recommend that you allow at least £1,500 to cover legal costs.
Can I buy more shares in the future?
Yes. This is called 'staircasing'. You can normally buy all of the remaining shares until you own your home outright. The price you pay will depend on how much your home is worth at the time you buy more shares. The rent you pay will reduce proportionately to the number of extra shares you can buy.
What happens if I want to sell my home in the future?
This will depend on what is written in your lease. You will normally have to give the housing association a period of time to find a buyer for your share. You also have the option to buy the remaining shares and sell the property outright at the same time. The share must be sold at a value set by an independent valuer.
Who is responsible for repairs?
A new home will usually come with a ten-year building guarantee as well as a defect period where the builder will rectify faults due to poor workmanship or materials. If the home is sold with white goods these too will come with a guarantee.
The shared owner is then responsible for meeting all of the costs of any future repairs. This would not include any communal areas where the costs are shared in accordance with the terms of the lease.
Can I make changes to my home?
Yes. However, for certain works you may need to get approval from the housing association first. Remember the amount you spend on improvements is not always reflected in an increase in the value of your home.
Who insures the property?
The housing association will provide buildings insurance cover and will recover the cost of this from the shared owner. The shared owner is responsible for arranging their own contents insurance.