Shared ownership home
Buying a Shared Ownership Home
Shared-ownership is a great way into home ownership and is the
main affordable housing scheme. If you can't afford to buy
outright, you can part buy/part rent your home.You might buy a 25%,
50% or 75% share in your home. You pay a rent for the share that
you don't buy normally set at an 'affordable' rate of, say, 2.75%.
The
bigger the share that you purchase, the less rent you have to pay.
When you can afford to do so, you can buy more shares until you own
your home outright in a
process known as 'staircasing'.
The other share in a shared ownership property is usually owned by a'housing association'. Alternatively, some shared ownership homes are provided by house builders directly on schemes called 'shared equity'. The Homes and Communities Agency refers to such schemes as 'Equity Loan' schemes because the Government provides a loan to buy part of the home. First Buy is the latest Government equity loan scheme, following on from Homebuy Direct.
Who can buy shared ownership housing?
Shared ownership housing schemes are usually intended for people
who cannot afford to buy a suitable home in any other way. However,
the way in which this is defined will vary considerably with some
shared ownership schemes merely being restricted to first time
buyers and others to applicants living within a certain borough.
Generally, priority goes to the following groups in
the first instance, in order of priority: existing social tenants;
serving military personnel; and then on equal priority ranking,
local priorities as set by Local Authorities.
When a new housing scheme is developed that includes
shared-ownership homes for sale, housing associations will usually
advertise shared ownership properties for sale. If you are
interested in shared ownership housing apply to the local authority
or a housing association that offers shared ownership housing in
your area as soon as possible.
You don't have to find a new housing development to be able to buy a shared ownership property. When shared owners want to move home, their property will either be offered to the housing association to find a buyer, or will be advertised in the local estate agents (i.e. as a second hand 'resale' property as described above).
Who does the repairs on shared ownership properties.
The shared 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'.
What is 'First Steps'?
First Steps is the Mayor of London's brand to promote low cost
home ownership throughout Greater London. First Steps London will
have its own branding for London equity loan/shared equity and
shared ownership/part buy
part rent in the capital.
What is 'shared equity'?
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). From a customer's perspective, the main
difference between the two schemes is that you are likely to need a
larger deposit on shared equity as the shares typically
start from 75%, compared to as little as 25% on shared ownership.
Also, the main providers of shared equity and other equity loan
schemes tend to be major
housebuilders.