Are you a first-time buyer looking to take your first step onto the property ladder, but unsure where to begin? If the open market seems out of reach, you may want to consider an alternative homebuying scheme like 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.
If you’ve asked yourself ‘how does the Shared Ownership process work?’, then our key steps to purchasing a home through Shared Ownership will answer your questions…
1. Do your research
At the start of your purchasing journey, it’s good to be aware of your savings, income, and other outgoings to help you nail down your budget. You will initially need to register your interest with a Shared Ownership home provider, like Catalyst.
2. Check your eligibility
There are certain eligibility criteria in place to owning a Shared Ownership home to ensure those who most need it get on to the property ladder. To be eligible for Shared Ownership, you must meet the following requirements:
– Your annual household income must be lower than £80,000 if you are buying outside of London, or £90,000 if you are buying in London
– You must not own a home
– You must be at least 18 years old
3. The hunt begins!
Once you know what you can afford and that Shared Ownership is the purchasing route for you, it’s time to start looking! It can be difficult to narrow down the number of homes to visit, so it’s good to bear in mind a list of “must-haves” and “nice to haves”. You will find most new build sites have show homes ready to see, which are a fantastic way to get a feel for how new homes will look once completed.
You can find our list of available homes in London and the South East here.
4. Understand how much you can borrow
Understanding your finances and how much you can borrow is a really key step and often one that people avoid at the start. Using our mortgage calculator can help indicate how much you can afford.
Knowing what your maximum budget is can really dictate your search criteria, so speaking with an independent mortgage broker, like Meridian Mortgages, to get a ‘decision in principle’, is always a wise move early in the process.
5. It’s time to reserve
After you have found the home for you, it’s time to reserve. It’s at this point you will need to pay your reservation fee – these can vary but for Shared Ownership it’s typically £500.
6. Appoint a solicitor
Following reservation, and once you have provided all relevant documents – it’s now time to instruct your mortgage broker and solicitor to handle the legal requirements of the sale.
At this meeting, your independent mortgage advisor will:
Check the information on your application to ensure it is correct and that you can afford to make the purchase.
- Agree the percentage share you will purchase, which is based on income, savings and any outstanding credit commitments.
- Provide you with information about choosing your solicitor and choosing the right mortgage for you.
7. Get the keys and become a homeowner!
It’s time to start making memories in your new home – congratulations you have made it onto the property ladder through Shared Ownership!
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.