What is shared Ownership?
An increasingly popular option for homebuyers, Shared Ownership is an ingenious and affordable initiative that could help you get on the property ladder faster. The way it works is that you buy a percentage share (usually between 25% and 75%) of the property and then pay subsidised rent to a Housing Association for the remainder. (Shared Ownership properties are sold and managed by Housing Associations.)
As you’re only buying a small share, you’ll need a smaller mortgage, which in turn means a lower deposit. So, you may well find that this is a more manageable way to secure the right place for you. Plus, the beauty of Shared Ownership is you can increase your stake over time, often until you own the house outright.
Who is Shared Ownership for?
Shared Ownership is popular with first-time buyers struggling to save a large enough deposit for the area they want to live in. That said, if you have owned property before you can still take part in the scheme, as long as you fit the following criteria:
- You are not able to afford to buy a home that is suitable on the open market
- You are 18 years of age or older
- Your household income is less than £80,000 per year (£90,000 if you live in London)
- You have a good credit rating
- You can find around £1,500 for the costs associated with buying a home (such as solicitors fees)
- If you currently own a home, it must be sold before you complete the purchase of your Shared Ownership home
- For some schemes there may be a requirement that you have a connection to the area in which you want to buy, for example you live or work there.
Please note that both your lender and your Housing Association will carry out an assessment to check that you are eligible for the scheme and that the property you want to buy will be affordable for you.
