“Shared Ownership” is one of HM Government’s Help to Buy schemes. It is designed to help prospective purchasers who are unable to afford a mortgage for 100% of the property value. It instead offers the purchaser an opportunity to purchase a share of the property (between 25% and 75% of the property value); meaning a smaller mortgage and a payment of rent due for the unowned share.
Who is eligible?
This scheme is not just for First Time Buyers. It is for “non-homeowners” which means anyone who does not own property in the UK or abroad; and who cannot afford to buy 100% of the property value. To qualify, your household income must not be more that £80,000 a year outside London and must not be more than £90,000 a year inside London.
You would also be eligible if you are in the process of selling and buying another Shared Ownership property (provided of course that you could not afford to purchase 100% of the property value).
There are further sub-schemes available for individuals:
- “Olders People’s Shared Ownership” is a scheme available for people 55 years or over. The scheme is similar to ordinary Shared Ownership but it only lets you buy up to 75% of the property; and once you own 75% you will not have to pay any rent on the remaining share.
- “Home Ownership for People with long-term Disabilities (HOLD)” is a scheme designed to help individuals with long-term disabilities find a suitable home; such as, offering a Shared Ownership property that was a ground floor flat.
You will be able to get more information as to Shared Ownership and other schemes from your local Help to Buy agent.
What types of property?
This scheme is not just for newly-built property, although Shared Ownership is offered more widely within newly-built developments.
The types of properties available varies depending on the development, but you could purchase a flat, house or bungalow. The title acquired will be leasehold. The site office at the development will be able to offer more information as to the scheme and the properties they have for sale. They should also confirm the likely rent as well as the purchase price (of the share), so you can assess the affordability of the purchase.
A purchaser could buy an existing property through resale programmes. This is where the current owner of a Shared Ownership property is selling their share in the property. The housing association will list the property for sale and will act as an agent in organising the sale between the vendor and purchaser. A lawyer will assist with the legal transaction for either party in the usual way.
Here is a very useful link on the Help to Buy government website (https://www.helptobuy.gov.uk/equity-loan/find-helptobuy-agent/). It allows you to search for the eligible properties within your area of interest and remaining areas in England. The results generated will show you a snap-shot of useful details for the property; namely a photo, the share available to buy and how much the rent payment will be.
Who should I contact?
You need to find the right experts to help you. A great place to start is with your local Help to Buy agent, who should then refer you on to new developments or housing associations; depending on whether or not you are interested in a newly-built property or an existing property.
Once you have found your new property, you should speak with a financial advisor to discuss your mortgage options and importantly, a specialist lawyer to act on your behalf in the purchase.
Here at Brethertons LLP we are experienced in the Help to Buy process and would be more than happy to help you. Please do get in touch with your enquiry. We can discuss any questions you may have and provide our quotation for you.
If you would like advice, please contact a member of our Conveyancing Team.