Shared Ownership is a government backed Part Buy/Part Rent scheme designed to help you take that first step on the property ladder. The properties sold under this scheme are usually new build apartments or houses; you can purchase shares from 25% up to a maximum of 75% on the initial purchase.
As this scheme is designed to be the first step onto the property ladder you cannot own another property or land in the UK or abroad.
All applicants are expected to purchase the maximum share they can afford; this will be dependent on your income and savings which you will need for your deposit, and any financial commitments you may already have. You will need to use some of your savings for legal fees and the rest of your savings will be required for your deposit. You will need to arrange a mortgage for the share you want to buy you will also have to pay a discounted rent to your landlord on the share you don't own and a service charge
Your discounted rent is due monthly and the amount depends on the share that you own. This amount will be reviewed annually. Service charges will vary between properties and will include the cost of insuring the building and may include 'communal' costs e.g. lift maintenance, cleaning communal areas etc. You are liable for all household bills e.g. council tax, utilities contents insurance etc. You will be responsible for your own repairs as a home owner.
When you come to purchase a home through shared ownership, applicants will be expected to obtain independent financial advice through a financial advisor who has knowledge of shared ownership. The financial advisor will advise you on the maximum share that would be affordable and sustainable for you and what mortgage products are currently available for shared ownership. You will need to supply proof of income and other documents to the financial advisor. We have a panel of Independent Financial Advisors who know the shared ownership market and they are available for you to contact.
You will need a solicitor or Legal Conveyancer to act for you with the legal side of buying a property. It is recommended to use a solicitor experienced in shared ownership and you know their fees before they commence any legal work on your behalf. We have a panel of solicitors who know the shared ownership market and they are available for you to contact for quotes on conveyance when you are in a position to purchase. Apart from solicitor's fees there is the Land Registry fee and Search Fees. Stamp Duty has been removed for most initial shares for shared ownership for the time being. As a guideline, you should have savings or access to around £2,000 to cover the various fees.
You may purchase further shares in the future known as stair-casing, and generally you may stair-case until you own your home outright. A RICS valuer will need to value your property as further shares are based upon the current market value. You will incur legal and surveyor fees when stair-casing.
If you decide to sell your home, you need to contact your housing provider landlord who will try to find a buyer for you from their waiting lists. If they are unable to find a buyer within the lease's pre-determined time scale which is generally 8 weeks, the property can be sold on the open market. An independent RICS valuer determines the price (not negotiable) at which the property can be sold and it would be your responsibility to pay the valuation fee and any other costs associated with the sale of the property.
When you buy new build Shared Ownership property, you enter into a lease agreement, usually 99 years long. Your solicitor will explain the lease etc, but the main areas covered are the repairs and other outgoings that you and the housing association are responsible for, how the rent and service charge will be calculated and paid, and how you can buy further shares or sell the property in the future. You essentially have all the same rights and responsibilities of any homeowner. You are responsible for all maintenance and repairs to your home, including boundary fences, etc although your landlord is responsible for repairs to 'common parts' in a development. For any common parts such as roofs for apartment blocks you pay into a sinking fund within your service charge towards repairs in the future.
You will not be able to sub-let the property (with the exception of serving Ministry of Defence) or use your home for business or do anything that could affect the buildings insurance.
For any improvements or adaptations, you should always consult with your housing provider/ landlord first. If your improvements add value to the property, this will be taken into account when you sell the property or buy extra shares so that you get the full benefit of them.
REMEMBER YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED AGAINST IT.
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