Friday 26 July

Shared Ownership Guide by Catalyst

Buying a new home can be an overwhelming process, especially when you’re trying to look for the best deal possible. You may have been advised to look at the various home-buying schemes that have been made available through different developers and housing associations, but when it comes to finding the one that’s best for you, it can be easy to be clouded by the number of offers that are out there. Amongst this confusion, we wanted to hone in on our primary buying scheme and give you a Shared Ownership* guide that confronts the most frequently asked questions about it. This guide to Shared Ownership will cover everything, from explaining what the Shared Ownership scheme is to covering the benefits of Shared Ownership and Shared Ownership eligibility.

What is Shared Ownership?

In a guide to Shared Ownership, it is only natural that the first question to answer would be ‘what is Shared Ownership?’

Shared Ownership properties are available through a part-buy, part-rent scheme that is designed to make the house buying process easier and more affordable. Therefore, allowing those who wouldn’t usually be able to afford to buy a home on the open market able to. Through this scheme, you buy a share of your chosen home and pay a subsidised rent on the rest, which goes to the housing association that you’re buying from. The share of your home that you can buy will be between 25% and 75% of its value. Once you’ve decided on the size that you want your share to be, you can calculate how much your deposit and your mortgage repayments will be. You only need a 5% deposit for the share that you will actually own, making your deposit even cheaper.

Am I eligible for Shared Ownership?

When it comes to Shared Ownership eligibility, the criteria is relatively open, leaving the opportunity to take advantage of the Shared Ownership scheme available to more people than you might think.
To be eligible to buy into Shared Ownership properties, you must:

  • Be at least 18 years old and have a household income of £80,000 or less per year, or £90,000 or less if you live in London.
  • Be a first-time buyer or have owned a home before but now can’t afford to buy one that is suitable for your housing needs.
  • Be able to show that you have a good credit history and be able to afford the regular rent payments and mortgage repayments involved in the Shared Ownership process.

Can I buy more shares in my home?

Buying more shares in Shared Ownership properties is an option that becomes available to you after 12 months of being in your new home. Despite these properties being marketed as leasehold, you can slowly increase the share of the home that you own. The process of buying more shares in your Shared Ownership home is known as staircasing and allows you, over time, to own 100% of your home, eliminating the need to pay rent.

What are the benefits of Shared Ownership?

To bring this Shared Ownership guide to a close, we wanted to highlight the benefits of Shared Ownership to you.

  • Shared Ownership offers a way onto the property ladder that is more affordable than buying a home outright.
  • A key benefit of Shared Ownership properties is the freedom that you get with it when it comes to decorating. Unlike when you rent a home on the open market, the fact that you own a share of the home means that you can personalise your home as if you owned it outright!
  • The rent that you pay on the remaining share of your home is cheaper than it would be if you were renting on the open market.
  • Another of the benefits of Shared Ownership is that you always have the option to either buy more shares in your home, or sell the ones that you own already. This means you will either be lowering or increasing your rent payments whilst increasing or lowering your mortgage payments.
  • Unlike renting on the open market, you have a level of security on your tenure. As long as you keep up with your rental and mortgage payments, you have the right to stay in the property for as long as you like.

If there is anything that this Shared Ownership guide hasn’t covered that you would like answered, visit: https://help.chg.org.uk/help/home-ownership/Shared-Ownership for more information.

*T&C’s apply.