Shared ownership is one of the most popular elements of the Government’s affordable homes schemes with around 200,000 shared ownership properties in the UK.
Here are some of the key facts of shared ownership.
To qualify for shared ownership, you must be a first-time buyer; someone who used to own your own home but cannot afford to buy now; or are an existing shared owner.
Priority on waiting lists is given to military personnel.
To qualify for shared ownership in England, buyers must have a household income of less than £80,000 (£90,000 in London). Wales, Scotland and Northern Ireland have their own specific schemes.
Shared ownership is generally offered by housing associations and can include both new-build homes and re-sold properties.
A buyer can purchase a percentage share of the property – the minimum is 25 percent and the maximum 75 percent – and then pays rent on the outstanding percentage.
The buyer can buy a bigger share of their home when they can afford it, a process known as staircasing. Eventually the buyer may own the property outright.
The cost of buying a new share will depend on the current value of the property, which will be decided by an independent valuer commissioned by the housing association. You will have to pay the fee for the valuation.
The over-55s have their own shared ownership scheme, called OPSO, which offers downsizers in particular the opportunity to move into more suitable homes. Under OPSO, a buyer can only own a maximum 75 percent of the property.
Not all lenders will offer a mortgage on a shared ownership home. However, there are a number of specialist mortgages available.
All property in England marketed as shared ownership is sold on a leasehold basis, meaning that the homeowner must pay an annual service and ground rent charge for maintenance.
When you come to sell your shared ownership home, the housing association has first refusal on purchasing it. Where the housing association still owns a share of the property, it may insist on finding a buyer, but if you own 100 percent of the property, you can sell your home on the open market.