Shared Ownership
Overview
Shared ownership provides an affordable way to buy a home. You purchase a share in a new home and pay a subsidised rent on the part you don't own. It’s designed to help you buy a home, it’s flexible, allowing you to buy more of your home in the future, can cost less than renting and you know you are investing in your home rather than just paying 100% rent.
You will have the same rights and responsibilities as a home owner, such as carrying out repairs and ensuring the contents of your home are insured.
The initial share you buy will be based on what you can afford. Most of our shared owners buy an initial 35% and pay rent on the remainder. In time you can buy more of your home.
We have a range of properties that we sell, so shared ownership could help you buy your next home if you’re a first time buyer, down sizing or coming out of a relationship or even if you’re looking for a larger home.
Shares generally start from 35% of the full market value. The maximum initial share available is 75%.
Shared ownership is aimed at helping people in housing need who cannot afford to buy a property on the open market. Usually this is first time buyers but shared ownership can also help people who have previously owned a property and are now unable to buy without assistance. For example, in the case of relationship breakdowns or families who are overcrowded in their existing homes.
If the following statements apply to you then it is likely that you will generally be eligible for shared ownership:
- Annual household income of less than £80,000
- Do not currently own a home
- Have no outstanding credit problems
- Unable to purchase a home suitable for your needs without assistance
- You own part of your home rather than paying rent with no return
- You will only need to secure a mortgage for a percentage of the property price, making it more affordable
- You'll need a much smaller deposit than if you bought the property outright
- The combined monthly mortgage and rent payments usually work out cheaper than buying outright or even renting privately
- In most cases you can buy additional shares and possible own your home outright.
The size of the initial share you buy will usually be between 35% and 75% of the full purchase price and is calculated to your personal circumstances making it affordable for you. You will pay a subsidised rent on the share that you don't own. The rent is reviewed on a yearly basis and any increase will be applied in April each year.
In the future you may wish to purchase further shares in your home and eventually own it outright. The Sales team are happy to assist with any enquiries you may have.
You are under no obligation to buy further shares and can remain a shared owner for as long as you wish as long as you make payments of your mortgage, rent and servuce charge and comply with the terms of your lease.
When buying a shared ownership property you enter into a lease agreement. As a shared owner you take on the same responsibilities as any other home owner, including being responsible for any repairs within your property and plot. With most new build homes a defects liability period is granted where, for a specific time, faults will be dealt with by the developer. Details of what this covers and timescales may vary for each development.
The lease will state this in detail, but you are responsible for maintaining, repairing or replacing:
- Floors and ceilings inside your home
- Internal walls in your home
- Doors and door frames
- The glass in your windows
- Fixtures and fittings such as kitchen units, bath, etc
- Piping, drains and wiring that serves only your home
- Redecoration (including plastering)
- Your garden including shed and fence panels
- Gas and other safety checks
Your lease is an important document which forms the legal contract between you, as the buyer, and us as your landlord. Your solicitor should have explained the lease and its contents before you bought your home, but we have provided some information for your reference.
Your lease is an important legal document so keep it in a safe place.
Generally speaking the following will/could apply;
Mortgage / broker fee
Mortgage deposit - minimum 5% of the share price
Legal fees
Moving costs
Your lease is an important document which forms the legal contract between you, as the buyer, and us, as your landlord. Your solicitor should have explained the lease and its contents before you bought your home.
The lease gives you the right to use and live in your home and explains your rights of ownership on the property. Although you have not bought the property outright you will have the usual rights and responsibilities of a full owner occupier. The lease agreement is a legal document and details your responsibilites - to pay rent, maintenance responsibilites, how to buy further shares and sell your home. The lease will contain a clause relating to subletting (which is not permitted) and also keeping pets in your new home.
If you need legal advice regarding your lease you should seek independent advice. As a general guide your lease sets out the following:
- The length of your lease, including the date it started
- Your responsibilities as the owner/leaseholder
- Our responsibilities as the landlord.
The lease will also describe the property that you have bought and will contain plans showing details of any garden, shed or garage and your rights, if any, over communal areas.
