Shared ownership

Shared Ownership makes it possible to buy a property which otherwise would not have been affordable. It is a part buy/part rent scheme, where you buy a share in the property and pay a subsidised rent on the share you don’t own plus any service charges. It is designed as a stepping stone to full home ownership, allowing you to buy further shares in your property when you can afford to.

Usually our shared owners own a 40% share in their home, but you can buy between 25% and 75% depending on affordability.

In order to buy your home you must have savings or access to sufficient funds to cover the following (we estimate this amount to be approximately £4,000).

  • The bank or building society survey
  • Legal fees - We can supply a list of reputable solicitors who are familiar with shared ownership.
  • Stamp duty - Depending upon the value of the property and the size of share you are purchasing. Your solicitor will advise you.
  • Deposit – In the current market you will need a 10% deposit on the percentage share of your property.
  • £500 reservation fee. This money will then be subtracted from the amount payable upon completion of sale (only applies to reservations at a new development).

As part of the process of buying a shared ownership home you’ll be required to take part in a financial interview. This is a requirement of the Homes & Communities Agency. The interview will assess your financial ability to afford the property that you’re looking to buy.

In addition, you will normally have to take out a mortgage for the share of the property you wish to purchase. There are many financial advisers who can help you with arranging a mortgage.

What does a shared ownership lease entitle me to?
Whether you buy a house or a flat we will grant you a lease. The lease is normally for 99 or 125 years but the terms can vary. Your solicitor will confirm this with you. It will entitle you to live in your house as an owner-occupier. It will also allow you to buy further shares in your property and sets out how you can do this. It also states that you can sell your property.

Staircasing

Buying additional shares in your home is a process known as staircasing, and it allows you to increase the share of your property all the way to 100% in most cases, starting from as little as a 10% share. If you are interested in buying more shares in your home or buying it outright please email us: housing@howard-cottage.co.uk 

Shared Ownership - Resales

You can sell your home at anytime for whatever reason. For information on selling your shared ownership home and what you need to start the process, please see the BMA Property Group website who will manage the process on our behalf.

Can I make improvements or alterations to my home?
You should consult with us first before making any structural improvements or alterations. Your lease will confirm what permissions you are required to obtain. If your (authorised) improvements add value to your property, this will be considered when you sell the property or buy extra shares, in order for you to receive benefit from them.

Rights and Responsibilities

When you buy a New Build Shared Ownership property, you enter into a lease agreement, typically 99 years long although some leases vary e.g. 125 years. Re-sale properties will have varying terms left on the lease so you should check how may years are left on it. Your solicitor will explain the lease, but the main areas covered are the repairs and other outgoings that either you and/or the housing association are responsible for, how the rent and service charge will be calculated and paid, and how you can buy further shares (if appropriate) or sell the property in the future. You essentially have all the same rights and responsibilities of any homeowner. You are responsible for all maintenance and repairs to your home, including boundary fences, kitchen fittings, electrical cabling, water pipes, sanitary ware etc although your landlord is responsible for repairs to 'common parts' in a development, for example the roof in an apartment block.

What happened if I get into financial difficulties?
The mortgage contract is between you and your bank/building society. If you begin to have financial problems and you cannot pay your mortgage you should let them know as soon as possible. Then talk to us to see if we can do anything to help.

You will not be able to sub-let the property (with the exception of serving Ministry of Defence) or use your home for business (without the written authority of the landlord) or do anything that could affect the buildings insurance.

Can I re-mortgage my home?

Yes you can re-mortgage to obtain a better mortgage deal. In some circumstances re-mortgaging can involve adding or removing someone from the mortgage and lease. This is known as a deed of transfer or transfer of equity and you will need to take legal advice on the process. If you are a leaseholder of a shared ownership property,

any changes to the ownership must be approved and meet with the Government’s affordable homes criteria.

I bought my home with somebody else but now we are splitting up. What do I do?

First you should take legal advice to sort out the best option for you both. If you are both named on the mortgage, you should both speak to your mortgage lender who will advise you on what to do.  You will need to decide whether one of you wants to stay in the property, in which case the mortgage and lease may be transferred to that person, or you may both decide to sell your home. You will both remain jointly responsible for your mortgage and service charges until a solution has been found that everyone agrees to.