Now Help to Buy has ended Shared Ownership provides a solution for an increasing number of people otherwise priced out of the housing market.
Shared Ownership is a government-backed scheme that has been around for more than 35 years and has helped over 200,000* people buy a home. With Shared Ownership you can buy a home that may have appeared out of reach, so you can put down roots. Better still, it’s usually cheaper than renting.
The buyer pays a mortgage on the share they own and pays a subsidised rent to a Housing Association on the remaining share. Because the purchaser only needs a mortgage for the share they are buying, the amount of money required for a deposit is usually lower when compared to the amount that would be required when purchasing outright.
Are you eligible?
There are three things to think about when looking into Shared Ownership:
- You must earn less than £80,000 a year, per household (£90,000 in London).
- You must be a first-time buyer, or no longer have your name attached to a house (if you are selling your home at the moment, speak to the provider who will be able to advise you.
- You should not be able to buy a similar property outright.
Shared Ownership costs are usually lower than other housing options for several reasons:
- The rent is less than the rate charged on the open market and is usually charged at 2.75% of the property value per annum.
- You can start with as little as a 25% share if buying through the existing scheme, or from as little as 10% if buying through the new model.
- Your deposit will be 5-10% of the price of the share, not of the full market value of the whole property.
- Stamp Duty Land Tax (SDLT or simply ‘Stamp Duty’) can generally be deferred until your share reaches 80%.
As a carer for her disabled son, Anna from Oxford was finding it impossible to buy a property on the open market. Thankfully, the answer to her housing dilemma came in the form of Shared Ownership which allowed Anna to use the remainder of her money to put down a deposit on a two-bedroom flat at the Oval – a new development in Rose Hill built by Oxford City Council and marketed by Taylor’s Estate Agents, part of the Countrywide Group.
Anna said: “Since I first tried (and failed) to buy in Oxford way back in 1989 when I was a young teacher, it's always been my dream to have a home in Oxford. But it was always just out of my reach. Now, through the Shared Ownership scheme, it has finally become a reality – and just when it was most needed for myself and my son.”
Owners can increase their share during their time in the property via a process known as ‘staircasing’, and in most cases can staircase all the way to 100%. In this instance, you will no longer pay any rent, just the mortgage along with any relevant service charges.
Shared Ownership properties are mostly found on new build private developments as a certain number of Shared Ownership homes will often be required as a part of the planning permission for a development. A small but growing number of resales are also available.
Shared Ownership for Wales
Shared Ownership for Wales differs slightly. It still provides support to those wanting to buy a home but to be eligible for the Shared Ownership in Wales, you must:
be buying a share in an eligible home from a participating landlord
have a combined household income of £60,000 or less each year
be a first time buyer
be relocating for work purposes to an area where property prices do not allow you to buy a home suitable for your family size
not currently own another home
be unable to afford to buy a property on the open market
Not sub-let any part of the home being bought through the scheme
must be financially able to buy the minimum share available, pass the financial assessment and secure a mortgage
Interested? We have national coverage and act as sales agents for many of the large Shared Ownership providers. We have access to Countrywide Mortgage Services, conveyancers and a team – who have sold over 2,000 properties over the last three years – to help you on your property journey.