Buying a Shared Ownership Home
Shared-ownership is a great way into home ownership and is the main affordable housing scheme. If you can't afford to buy outright, you can part buy/part rent your home.You might buy a 25%, 50% or 75% share in your home. You pay a rent for the share that you don't buy; normally set at an 'affordable' rate of, say, 3%. The bigger the share that you purchase, the less rent you have to pay.
When you can afford to do so, you can buy more shares until you own your home outright in a process known as 'staircasing'.
The other share in a shared ownership property is usually owned by a'housing association'. Alternatively, some shared ownership homes are provided by house builders directly on schemes called 'shared equity'. The Homes and Communities Agency refers to such schemes as 'Equity Loan' schemes because the Government provides a loan to buy part of the home.
Who can buy shared ownership housing?
You can buy a home through shared ownership if:
Your household earns £80,000 a year or less (or £90,000 a year or less in London.
You're a first-time buyer (or you used to own a home, but can't afford to buy one now)
You rent a council or housing association property
When a new housing scheme is developed that includes shared-ownership homes for sale, housing associations will usually advertise shared ownership properties for sale. If you are interested in shared ownership housing apply to the local authority or a housing association that offers shared ownership housing in your area as soon as possible.
You don't have to find a new housing development to be able to buy a shared ownership property. When shared owners want to move home, their property will either be offered to the housing association to find a buyer, or will be advertised in the local estate agents (i.e. as a second hand 'resale' property as described above).
Who does the repairs on shared ownership properties.
The shared ownership lease between you and the housing association will set out your rights and responsibilities as a shared owner. Although you have not bought the property outright, you will generally have the normal rights and responsibilities of a full owner-occupier. In particular, you will generally be responsible for the cost of repair and maintenance to your home, paid through a monthly fee known as a 'service charge'.
What is 'First Steps'?
First Steps is the Mayor of London's brand to promote low cost home ownership throughout Greater London. First Steps London will have its own branding for London equity loan/shared equity and shared ownership/part buy part rent in the capital.
What is 'shared equity'?
Shared equity is not the same thing as shared ownership. With shared equity, you generally use an 'equity loan' to form part of a deposit but the person buying the home owns the whole property (though the provider of the equity loan usually has an agreement to share in any appreciation). From a customer's perspective, the main difference between the two schemes is that you are likely to need a larger deposit on shared equity as the shares typically start from 75%, compared to as little as 25% on shared ownership. Also, the main providers of shared equity and other equity loan schemes tend to be major house builders.