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This week (October 5-11th 2015) is officially Shared Ownership Week where housing associations across the country are promoting the benefits of shared ownership schemes.
Shared ownership is where you buy part of your new home and pay rent on the remaining share. Usually, you buy between 25% and 75% of the home at the outset and then have the option to buy more shares in the home later on (this is called staircasing).
The cost of buying a new share will depend on how much your home is worth when you want to buy the extra share. If property prices in your area have gone up, you’ll pay more than for your first share. If your home has dropped in value, your new share will be cheaper.
Shared ownership schemes are run by Housing Associations who will offer newly built homes for sale or existing homes through their resale schemes (typically when a shared owner wants to sell and move on to another property.) Shared ownership homes are always leasehold not freehold.
Mortgage lenders will offer loans for shared ownership purchases.
You are eligible to buy a shared ownership home if you meet the following criteria:
Priority for shared ownership schemes is given to people already renting a local authority or housing association property and to people in the Armed Forces.
The amount you have to pay for your shared ownership home each month will obviously vary with the value of the home and the percentage that you own. Essentially, each month you’ll have to budget for:
As the leaseholder, you will be responsible for all repairs inside your property. The Housing Association will be responsible for any communal parts such as lifts, staircases, gardens. You will pay for this through the annual service charge.
The Housing Association will have buildings insurance to cover the structure of the building but you will need to have your own contents insurance policy to cover your belongings.
Home Ownership for People with Long-Term Disabilities (HOLD) can help you buy a shared ownership home if you have a long-term disability.
You can only apply for HOLD if the properties available through the other home ownership schemes don’t meet your needs, e.g. you need a ground-floor property.
You can get help from another home ownership scheme called Older People’s Shared Ownership if you’re aged 55 or over.
It works in the same way as the general shared ownership scheme, but you can only buy up to 75% of your home. Once you own 75% you won’t have to pay rent on the remaining share.
If you own 100% of your home, you can sell it yourself. When you put it up for sale, the housing association has the right to buy the property back first. This is known as ‘first refusal’ and the housing association has this right for 21 years after you fully own the home.
If you own a share of your home, the housing association has the right to find a buyer for it.
To buy a home through a shared ownership scheme contact the Help to Buy agent in the area you want to live.
We will get back to you as soon as possible.