Now the Help to Buy application deadline has passed, Shared Ownership is becoming an even more prominent route to home ownership in the capital, here’s what you need to know about Shared Ownership.
Shared Ownership offers first time buyers an alternative route on to the property ladder, lowering some of the financial barriers associated with buying a first home. Through Shared Ownership, purchasers buy a percentage share of their home, typically between 25-75%, and pay rent on the remaining portion. Buyers only require a deposit and mortgage for the share they are buying, helping those with lower savings and incomes to get on to the property ladder.
As and when they can afford to, buyers can purchase greater shares in their home until they own their home outright, through a process called ‘staircasing’.
Interested in learning more? Here’s what you need to know about Shared Ownership
- What is the Eligibility Criteria with Shared Ownership?
Eligibility criteria is in place to ensure that Shared Ownership homes are offered to the people who need them most, as well as making sure that buyers can keep up with the financial commitment of being a homeowner. If buying a home in London, at a scheme such as The Switch, you must have a household income below £90,000. If you were buying outside of London, for example Kite Meadows, the maximum household income would be £80,000. You also must not currently own a property, have a good credit history, and a minimum of £4,000 to cover the costs of buying a home.
- How does Stamp Duty work with Shared Ownership?
Through Shared Ownership, there are two options when it comes to stamp duty payment. One, is that you pay SDLT on the full market value of your home in one payment. The second, is that you pay SDLT on the share that you are purchasing, and as and when you might choose to staircase, you may have to make further payments to increase your share of the property. These payments will depend on the value of your property and the share that you own, and will follow the above percentage portions based on the new stamp duty cut announcement.
- How long does it take from first enquiring about a Shared Ownership home to moving in?
If the buyer is viewing a Shared Ownership property that is ready to move in, and has all their finances in line, then sales can progress from first enquiry to completion in 6-8 weeks. However, due to the demand for homes, a lot of new build homes in our new developments are often sold before they are completed – this is known as buying ‘off-plan’. This gives buyers the opportunity to have their pick of the plots available but can add time on to the completion process. Catalyst will show customers floorplans in advance, and often give a tour of a show home or marketing suite, giving buyers a feel for the quality of build, location, and general site layout.
- Can I decorate my Shared Ownership home?
As you own your Shared Ownership property, you can decorate your home however you wish, which differs from typical rental homes. However, there are limitations on major alternations such as structural changes to your home.
- Can I have a pet in my Shared Ownership home?
Yes – we have a flexible pet policy and can have a pet at nearly all our developments however you will need to request permission at the first point of sale. It’s always worth double checking with the sales team when you enquire.
At Catalyst, we offer a variety of Shared Ownership homes available across London and the South East, find out more about our available homes here.