Looking to get onto the property ladder?

Discover how you could own your home thanks to Shared Ownership.

With various first-time buyer products and schemes available to those looking to buy their first home, it can be difficult to know where to start. This is why, in this article, we’d like to focus on shared ownership - one of the more affordable ways to buy.

So, let’s take a look at what it’s all about.

What is Shared Ownership?

Owning your dream family home could be more affordable than you think. With Shared Ownership, you can buy a share of your new home from a housing association, built by credible builders. Your share of the home will typically be between 10% to 75% of the home's value, whilst paying rent on the share that’s owned by the housing association. Whether you’re part of a joint application or buying for yourself, you own the share of the property that you’ve bought and, just like on the open market, you choose whether you want to live there by yourself, with your partner, family, or friend.

In short, Shared Ownership gives you the chance to move out of rented and/or shared accommodation, and offers you an excellent starting point to owning your own home.

I am a sole-income household. Can I buy a home with Shared Ownership?

Yes! If you have a smaller deposit and a moderate income, you can still own the home you’ve been dreaming of. What's more, if your financial circumstances change, and you have more money to invest after you’ve moved in, you have the option to buy up to 100% of your home in the future, this is called 'staircasing'. Different housing associations may have different processes to increase your level of ownership of the property. Get in touch with your local branch to discuss your options.

Advantages of Shared Ownership:

• A great way to get a foot on the property ladder.
• Staircasing allows you to increase the percentage of your homeownership, as and when your income allows you to.
• Shared Ownership homes may already be supplied with white goods (e.g. fridge, freezer, dishwasher), so you can save money on new appliances.
• Built following the latest housing guidelines if the property is newly built.

Sounds too good to be true? Thousands of people across England and Wales are taking advantage of this fantastic scheme, with this trend set to continue.^

Who can apply?

The big question we all ask when considering Shared Ownership is – am I eligible? There are two things to think about when looking to use Shared Ownership.

• You must earn £80,000 a year or less per household (£90,000 or less* if you’re in London, £60,000 or less** in Wales, Scotland follows different criteria, details of which are not included in this article).
• You cannot afford all of the deposit and mortgage payments for a home that meets your needs.
• You are a first-time buyer.
• You used to own a home but cannot afford to buy a new one now.
• You’re forming a new household – for example, buying and moving in with a partner or after a relationship breakdown, you decide to buy a home to live in by yourself, without a partner.
• You own a home and want to move, but cannot afford a new home that meets your needs.
• You already own an existing Shared Ownership property and would like to move.

How can I get a mortgage for Shared Ownership?

You’ll need a mortgage in the same way you would if you were buying on the open market. Shared Ownership mortgages are available from a number of mortgage lenders. If you want to find out more about shared ownership mortgages, visit our site or book a mortgage appointment for personalised advice.

Example: Say you've bought a 40% share of a property (5% coming from your deposit and 35% from the lender), then the other 60% would be owned by the landlord. This means that the monthly payment would be split into two parts, 1) a repayment on a mortgage and 2) a monthly rent.

Here’s a visual representation of how this could look:

Don’t worry, we have our in-house mortgage advisers on hand to answer any of your questions and to find out if this is the right scheme for you.

Other benefits of Shared Ownership

The benefits of opting for a part rent/part buy scheme is that you have more flexibility in terms of the deposit and share you want to buy, which means your mortgage is manageable based on your income. For many, this is a much more affordable route than full rental or traditional mortgage options. Although you are paying rent, you can gradually reduce this amount by staircasing your way out of the agreement and own up to 100% of your home.

What are the disadvantages of Shared Ownership?

This type of purchase isn’t for everyone, and there may be some additional costs and restrictions on what you can and can’t do with the property under the lease agreement. It is always advisable to do your homework in terms of maintenance charges and costs associated with staircasing, including mortgage, legal and valuation fees. There may also be other stipulations in the contract regarding renting the property and making changes under the lease, but our in-house team of experts will be able to guide you through the process.

To offer you more insight into Shared Ownership, we talked to Owen McLaughlin, the Managing Director at Countrywide Land and New Homes.

After having worked in the property industry for 35 years, here are this thoughts on Shared Ownership:

“With property prices having risen dramatically over the last decade and in a market place that continues to prove difficult for many first-time buyers and young families to easily access, a shared ownership purchase can enable those people struggling to meet their housing need a genuine opportunity to own the home that suits their circumstances much more readily than if they were buying a home outright. Buyers are able to purchase additional shares in their home after they have moved in and, importantly, an owner can also sell a shared ownership property at any time, making sure there is a benefit from any increase in value since the original purchase was made. These are all excellent reasons to take advantage of this fantastic scheme, which operates across the country and is now something thousands of people have used in order to take those important steps to homeownership.”

Providing you go into the purchase with your eyes open to future staircasing costs and potential lease restrictions, Shared Ownership can be an affordable way to buy a home.

You have control of the deposit and share you want to purchase to keep costs at a level you can afford. Over time, you can own more and more of your home and even take advantage of price rises should you decide to sell in the future.

We are here to guide you step by step throughout the whole process, from the day you enquire to the moment you move in.