Shared Ownership Schemes 101

Shared Ownership Schemes 101

Shared ownership schemes are part of the Help-to-Buy schemes introduced by the government as a way to extend property ownership to anyone who dreams of being on the property ladder but can’t afford it. Shared ownership is provided through housing associations and enables you to buy a share of your home (between 25% and 75%) and pay rent on the remaining share. Shared ownership homes are always leasehold homes. When you buy the home, you become the owner of the lease.

There are certain criteria which you need to meet in order to be eligible for the scheme, such as the annual income threshold of £60,000 or less for a one or two-bedroomed property, or an annual income of £80,000 or less for a three or more bedroom property. You qualify if you’re a first time buyer, or if you’ve previously owned a home but can’t afford one anymore. You’re also eligible for the shared ownership scheme if you rent a council or housing association home.

It’s also possible to buy more shares in your home once you’ve paid off your allotted share. This process of ‘staircasing’ allows you to own your home outright, the amount of which depends on the current value of the property. The housing association will have the property valued, and you’ll pick up the tab for the valuator’s fee.

You can only sell your property once you own it outright. The housing association has what is known as ‘First Refusal’ rule, which basically means it has the first option to buy your property and this right is valid for a period of 21 years once you’ve paid off the property in full. If you only own a share of your home and want to sell, the housing association has the right to find a buyer.

There is regular ongoing schemes of shared ownership developments in the South West of London, in particular in Croydon, Lambeth and Wandsworth.

In the heart of Fitzrovia, Wealdstone, Edgware, Finchley Road and New Barnett you can live in the buzz of central London with a shared-ownership scheme through Origin housing association. Or you could even find something in Westminster if you work in the suburb, or are already a resident.

A tailor-made shared ownership scheme aimed at people between the ages 55 and 95 works much the same as the shared ownership scheme, with a caveat about 100 per cent ownership. Older people may only buy up to 75 per cent of the property. There is also the HOLD scheme, which is designed for people with long-term disabilities. It’s available if other Help-to-Buy schemes don’t match the needs of the applicants.

Do you want to get a foot on the UK property ladder but are unsure how you are going to raise the necessary capital? Don’t despair because shared ownership schemes are a great way for first-time home buyers and low-income earners to get a foot in the door. Take a look at the pro's and con's of shared ownership?

To find out more about shared ownership visit your local HomeBuy agent if you’re in the Greater London area or visit HomeBuy UK to find out about agents nationally. You’ll need to submit an application to your local HomeBuy agent via their website, or you can apply in writing.

photo credit: Social rented & shared ownership via Flicker (License)

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