SO WHAT IS SHARED OWNERSHIP?
Despite the name, Shared Ownership doesn’t mean sharing your home with someone else. It’s simply a step up to the first rung of the housing ladder and a great alternative to renting, perfect if you can’t afford to buy a house outright straight away.
You won’t be required to raise a substantial deposit based on the full value of your property because your mortgage and deposit will only cover the % share you purchase. You’ll also pay rent on the remaining share.
TELL ME MORE
In simple terms you buy a share in a home and pay rent on the share you don't own. The higher the % share you buy, the less rent you pay. Initially you can buy between 25% and 75% and we retain ownership of the share you don't buy. You can buy all or a portion of our share at any time after you’ve moved in. That’s a pretty good way of getting off the renting carousel and onto the property ladder!
If that sounds like a perfect solution to you, get in touch today and we’ll show you which properties are available in the Shared Ownership scheme.
BUYING A SHARE
If you have sufficient money put aside, it is possible you won’t even need a mortgage, you could buy your share outright using the money you’ve saved. However, most shares are financed with a mortgage which you must arrange through a Bank or Building Society, just as you would with a traditional house purchase. And just like a traditional house purchase, your home could be at risk if you don’t keep up the repayments.
Financial checks will be carried out to ensure you qualify for the scheme and we recommend you take individual financial advice too.
RENTING THE BALANCE
The larger the share you buy in your new home, the lower your rent will be. Don’t worry if the maths tie you in knots, we’ll give you full details of the rent you’ll pay and your mortgage provider will give you details of the monthly mortgage repayments with everything is broken down so it is easy-to-understand. On completion you’ll receive a lease entitling you to sell your property or buy more shares. The lease also explains about your responsibilities during the term of the agreement such as maintaining the property, rent and service charges.
For illustration purposes only: The rent element is calculated at 2.75% of the retained share per year e.g. £150K house with a 50% share purchased would be £2,062.50 pa - collected monthly at £171.88
I’M READY TO BUY MORE SHARES, WHAT DO I DO?
Ready to own a larger stake in your home? The good news is you can generally buy more shares any time after you become the owner.
The cost of a new share will depend on the value of your home when you want to buy it. We can arrange for an independent valuer to set the price of the share on your behalf.
Don’t forget, if property prices in your area have increased, you’ll need to pay more than you did for your first share. Likewise, should the value of your home have decreased, your new share will be cheaper.
READY TO BE A HOMEOWNER?
First of all talk to our Sales Advisor to see if you’re eligible. You’ll need to submit an eligibility application to the Local Help to Buy Agent. The Connect Housing Leasehold Team will contact you direct and take you through the process.
WHO CAN APPLY
You can buy a home through Shared Ownership if:
WHO CAN'T APPLY
You can't apply if:
NB: Land Registry currently has a delay of up to four months registering properties. Any delay in property registration will be reflected in the timescales we are able to release properties to purchasers.
SO WHAT IS HELP TO BUY EQUITY LOAN?
The Help to Buy Equity Loan scheme is designed to help you buy a new build home up to the value of £600,000. Basically the Government can provide an equity loan of between 10-20% of the purchase price of your new home to make it more affordable, you’ll only need a 5% deposit and a mortgage for the remainder.
TELL ME MORE
Contrary to popular belief the Help to Buy scheme is not just for first time buyers, the scheme is for any buyer looking to purchase a new build home. So, if you’re looking to get on to the property ladder or to move up it and you meet the qualifying criteria, this scheme might just provide the assistance you need.
Simply look-up your local Help to Buy agent, they’ll guide you through the options and explain the eligibility and affordability criteria. They also administer the Help to Buy Equity Loan scheme and have the authority to give you the go-ahead to purchase a home with help from the scheme. The agents make other key decisions during the purchase process.
Find your local Help to Buy agent: www.helptobuy.gov.uk/equity-loan/find-helptobuy-agent/
Please be aware that the Help to Buy Scheme is changing - CLICK HERE to find out how those changes may affect you.
HOW DOES IT WORK?
With a Help to Buy Equity Loan the Government lends you up to 20% of the cost of your newly built home, you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest. You won’t be charged any fees on the 20% loan for the first five years of owning your home.
See the example below, showing a home with a £200,000 price tag:
If the home in the example above sold for £210,000, you’d get £168,000 (80%, from your mortgage and the cash deposit) and you’d pay back £42,000 on the loan (20%). You’d need to pay off your mortgage with your share of the money.
SO WHAT IS HELP TO BUY ISA?
If you are saving to buy your first home, be it new build or otherwise, save money into a Help to Buy ISA and the Government will boost your savings by 25%. So, for every £200 you save, receive a government bonus of £50. You could receive a maximum government bonus of £3,000!
HOW DOES IT WORK?
You can open a Help to Buy ISA at a range of banks, building societies and credit unions.
The maximum you can save into your Help to Buy ISA is £200 a month, but to kickstart your account you can deposit a lump sum of up to £1,200 during your first month. You’ll need to have saved at least £1,600 in your Help to Buy ISA before you can claim the minimum government bonus of £400. The maximum government bonus you can receive is £3,000 - to receive that, you’ll need to have saved £12,000.
Help to Buy ISAs are for each first time buyer, so if you’re planning to buy a home with your partner you could receive a joint government bonus of up to £6,000 towards your first home!
When you buy your first home your solicitor will apply for the government bonus so that it can be added to the money you are putting towards your first home.
WHAT NEXT?You can find additional information on how the Help to Buy ISA works on the official Government Help to Buy website “Frequently asked questions” page: www.helptobuy.gov.uk/help-to-buy-isa/faq/