Shared Ownership - FAQs
Shared ownership gives you the opportunity to purchase a share in a property. You pay a mortgage on the share you own, in most cases, and pay rent on the remaining share. As you only need a mortgage for the share you are purchasing, the amount of money required for a deposit is a lot lower when compared to the amount that would be required when purchasing outright.
The purchaser has the option to increase his share during their time in the property via a process known as ‘staircasing’ thereby owning the property outright.
Depending on your circumstances then shared ownership may be for you.
The scheme is intended for people who cannot afford to buy a suitable home in any other way. You may be a first-time buyer looking for the perfect home for your growing family or looking to downsize with a large deposit or recently promoted.
- You must be at least 18 years old
- Unable to afford to purchase a house on the open market
- You must have sufficient savings to cover your deposit, solicitor’s fees and any other costs that come with purchasing a property
- Be able to raise a mortgage to cover the purchase
- To be able to afford to pay your mortgage, rent and household bills
- You must be registered on our housing Home Choice Plus housing register
- If purchasing a new build property – you must be registered with Orbit Homebuy
- Do not already own a property.
As long as you can show at least three years of self-employed accounts, you should be able to obtain a mortgage (providing your income is sufficient).
You will need to complete a Shared Ownership application form together with an Income & Expenditure Statement. You will also need to produce various documents to support your application. Income applications will not be accepted.
The application will be assessed which normally takes around 1 week. If you are successful, we will require a £200 reservation fee which will reserve your property.
If you own a property that is currently up for sale, then to be eligible you will need to show that your current property is unsuitable for you. Existing homeowners must have sold the property (subject to contract), before you can apply for a property.
To purchase a shared ownership property, you will need to have access to a sum of money to use as the deposit, to cover solicitor’s fees and any other costs that come with purchasing a property. Normally you will then need to take out a mortgage to pay for the rest of your share.
You can approach a High Street Lender, Bank or Building Society, a financial advisor or an internet-based mortgage site. A list of mortgage providers is detailed here.
This will depend on the full market value of the property and the size of the share you purchasing. The benefit of shared ownership is that the deposit required will be significantly lower than if you were purchasing the property outright because you only need a deposit on the share you are purchasing. Generally, shared ownership deposits are between 5% and 10%.
The minimum share we allow you to purchase is 50% and the maximum share is 75%.
With resale properties, however, the minimum share will be whatever the seller has purchased. So, if the seller had a 70% share in their shared ownership property, the minimum share will be 70%.
No, if you can afford to purchase 100% of the property then you do not need shared ownership and you should look in the outright sale market.
When you purchase through shared ownership, we will grant you a lease which sets out your rights and responsibilities and also those of The Community Housing Group. The lease is a legally binding document
The lease is usually granted for 99 years and it will entitle you to live in your home in your home as an owner occupier. It allows you to buy further shares in your property and sell your property. It also sets out who is responsible for the repair and payment of rent and service charges. The lease does provide for an annual rent increase.
The lease can be terminated if you fail to comply with your responsibilities and you should ensure that your solicitor explains this fully to you.
The rent paid on the share not owned by you will be reviewed periodically, annually every April.
The amount of rent will vary for each home depending on the share you purchase and the value of your property when you buy it.
Once you have lived in your home for a certain period of time you can buy further shares in your property. This process is known as 'staircasing', which enables you to own a greater proportion of your home.
The greater the share you buy in your home, the less rent you will pay. You will be able to staircase as and when you can afford to in a minimum of 10% tranches, all the way to 100%. If you staircase to 100%, you become an outright owner and pay no rent.
Resales are shared ownership properties where the current owner is selling their share.
You will be responsible for all repairs and maintenance to your property. Should you wish to make any alterations or improvements, such as build a conservatory, you will have to ask our permission before any work is undertaken.
You can sell your share at any time to someone else, as long as they qualify for a shared ownership home in their right.