What is Shared Ownership?
Shared Ownership is a Help to Buy low cost home ownership product and a fantastic opportunity for people who wish to buy a property but cannot afford to buy outright.
Shared Ownership enables you to purchase an initial share of a home between 25% – 75% of the current open market value via a mortgage or savings and you pay a reduced rent on the share you do not own.
You may increase your share in the future through a process known as staircasing as you can afford to do so, with rent being adjusted to reflect this. In some cases you may be able to buy outright after as little as 1 year of occupation, although there are some restrictions on rural schemes.
By purchasing a shared ownership property your deposit will be lower than on the open market, as you only need to raise a deposit for the share you are buying and not the full open market value.
Am I eligible?
To be eligible to apply for a shared ownership home applicants must be registered with the local Help to Buy Agent.
To qualify for Help to Buy Shared Ownership you will need to meet the following criteria:
Your annual household income can be no more than £80,000.
- You should be unable to purchase a home suitable for your needs without assistance.
- You cannot be a current home owner (or be named on the deeds of another property) either in the UK or abroad.
- You must not have any outstanding credit issues (ie unsatisfied defaults or county court judgements).
To register with Help to Buy online please visit: www.helptobuyese.org.uk or contact them on Tel. 03333 214044.
Priority will be given to applicants who are serving military personnel and former members of the British Armed Forces honourably discharged in the last two years.
Some properties may require you to have a local connection to the area where you are interested in purchasing a Shared Ownership home, which the Association will confirm for each development.
Can I afford it?
A bank or building society will be able to determine your mortgage eligibility and it is recommended that you seek independent financial advice prior to applying for a property to see how much you can afford to borrow.
The Association will carry out an affordability check based on your borrowing and savings. Affordability cannot be granted if more than 50% of your household income is utilised to pay mortgage repayments, rent and service charge costs and existing debts.
What will I be buying?
Shared Ownership homes are sold on a leasehold basis and new build shared ownership properties are usually sold with a 99 year lease. Should you purchase a resale property you will be purchasing the remaining term of the lease from the existing shared owner.
The lease is a legally binding document between you and Broadland Housing Association which proves you own the property and covers the rights and responsibilities of both parties, maintenance, rent, buying more shares and re-selling.
What expenses will I be responsible for?
You will need to be able to cover the following expenses:
- Mortgage fees / repayments
- Rent and service charge
- Legal and valuation fees
- Stamp duty (please seek independent legal advice)
- Household bills – utility bills, council tax, contents insurance
- Repairs and maintenance to the property (after expiry of the after sales warranty where you are purchasing a new build property)