The most well known of the government’s home ownership schemes are the Help to Buy equity loans and Help to Buy mortgage guarantees. We have an in depth guide to these on our website, which you can read by clicking here. However, there are other less well known government affordable home ownership schemes which may be able to provide you with financial help to become a home owner if you live in England and can’t afford a home. This post looks at the Shared Ownership scheme.
What is Shared Ownership?
Shared ownership is a part buy/part rent scheme, and is provided through housing associations. The way it works is that you buy a share of your home at between 25% and 75% of your home’s current value, and then pay rent on the remaining share. Under this scheme you can buy either a newly built home or an existing one through resale programmes from housing associations. Shared ownership properties are always leasehold. You will need to take out a mortgage to pay for your share of your home, or use your own savings.
Eligibility
Shared ownership is only available in England – Wales, Scotland and Northern Ireland have their own home ownership schemes. You can only buy a home through shared ownership if your household earns £60,000 a year or less, although these figures are higher in London - £66,000 a year for a home with one or two bedrooms and £80,000 a year for a family home with three bedrooms or more. You will receive priority if you rent a council or housing association property, or if you’re a member of the armed forces. The scheme is only open to first time buyers or people who used to own a home but can’t afford to buy one now. Different local authorities may have additional priorities dependant on local housing needs.
Staircasing
After you become the owner of the home, you can buy more shares any time you can afford to. The cost of the share depends on the value of your home at the time of buying your share, not the value of the house when you first bought a share. So, if the property has increased in value, then the cost of the share will be more than when you bought your first share, but if your home has decreased in value, you will pay less per share than when you bought your home. You should note that although the housing association will get the property valued and tell you the cost of your new share, you will have to pay the valuer’s fee.
Older people and people with disabilities.
If you are aged 55 or over, you can get help from OPSO, the ‘Older People’s Shared Ownership’ scheme, which works in the same way, but you can only buy up to 75% of your home. Once you own 75% you won’t have to pay rent on the remaining share.
If you have a long-term disability, HOLD (Home Ownership for People with Long-Term Disabilities) can help you to buy any home that’s for sale on a shared ownership basis, but you can only apply for HOLD if the other Help to Buy schemes don’t meet your needs, e.g. a ground-floor property.
Selling your home
You can sell your home once you own 100% of it, but the housing association has first refusal (the right to buy the property back first). The housing association has this right for 21 years after you fully own your home. If you only own a share of your home and want to sell it, the housing association has the right to find a buyer for it.
How to apply for the shared ownership scheme
To apply to buy a home using this scheme, you will need to contact the Help to Buy agent in the area you want to live in. Click here to find your local Help to Buy agent.
For help with buying or selling your home, and for more info about shared ownership schemes, click here to visit the conveyancing page on our website.
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