Shared Ownership Mortgages

Where to find shared ownership schemes:
The Housing Corporation can give you the names of housing associations that are developing shared ownership or other home ownership schemes, in the area in which you wish to buy. Priority for the shared ownership scheme may be given to existing tenants of housing associations and councils, or those on the local authority or housing association waiting lists.

Bear in mind that demand for shared ownership houses is high and that there are relatively few houses available. In some areas there may be none. Even if you are accepted as a suitable applicant, you may have to wait some time before a property becomes available.

What is shared ownership?
Shared ownership was introduced to help people who cannot afford to buy a home outright. Through shared ownership you buy a share of the property and pay a rent on the remaining share you do not own. Gradually you may buy further shares and eventually own your home outright.

Although you have not bought the property outright, you will have the normal rights and responsibilities of a full owner-occupier. You are advised to ask your legal adviser as well as the social landlord if there are terms you do not understand.

Remember that house prices can go up or down. This means that sometimes you might pay more for buying additional shares or have to sell at a price less than you originally paid.

What is a registered social landlord?
Registered social landlords are non- profit making organisations who provide and manage homes for rent and sale for people in housing need who cannot afford to rent privately or buy.

A social landlord can be a housing association, a housing society or a non- profit making housing company. Most of these landlords provide housing with the help of public money given by the Housing Corporation or a local authority; in some cases, the social landlord may provide housing using its own money.

Where does the Housing Corporation fit in?
The Housing Corporation was set up by Parliament in 1964. Their job is to fund homes built by registered social landlords from money they get from central government. They also make sure that the money is well spent and provides homes of a good standard for those people with the greatest need for housing.

Social landlords must be registered with the Housing Corporation before they can receive public money. Once registered, social landlords are visited from time to time by Housing Corporation staff to help maintain a good standard of management of their property and finances.

Can I buy a shared ownership home with someone else?
In some cases up to four people can become joint owners but all joint applicants must individually and jointly meet the eligibility criteria. Your solicitor/licensed conveyancer will advise you.

What kind of property can be bought through shared ownership?
Shared ownership homes may be new or renovated flats or houses which are sold by social landlords. Prices vary according to location but are expected to be within the means of those people who cannot afford the prices of properties available for sale in the open market.

How does shared ownership work?
The share you purchase is funded by a mortgage which you will need to arrange, and can be arranged here at UK Financial Solutions for you. The remaining share you do not own is rented from the social landlord.

The size of the share to be purchased will depend on your income and savings. Normally applicants buy a 50% share but you may purchase a smaller or larger share (to start with, you can buy as little as 25% or as much as 75%). The higher the share you purchase the less rent you will have to pay. You will also have to pay a service charge when you buy a flat. Later on, if you wish and can afford to do so, you can buy a further share.

When you purchase through shared ownership, the social landlord will grant you a lease which sets out your rights and responsibilities.

What does the shared ownership lease entitle me to?
Whether you buy a house or flat under shared ownership terms, the social landlord will grant you a lease usually for 99 years. It will entitle you to live in your home as an owner-occupier. It will also entitle you to buy further shares in the property and sets out how you can do this. It also states that you can sell your property.

Other points covered in the lease set out your responsibility for repair and payment of rent and service charge. Although you have not bought the property outright, you will have the normal rights and responsibilities of a full owner-occupier.

If you have any questions on how the scheme operates ask the social landlord selling the property. You are also advised to take your own legal advice on the terms and conditions of the lease.

The cost of buying your own home
It is important to give careful thought to the costs and responsibilities of buying your own home. You will need to do some careful calculations to help you decide how much you can afford to spend on buying and running a home. You should also look carefully at house prices in the area you would like to live in. Prices can vary considerably from one area to the next.