Shared ownership

Buying a share means your mortgage and deposit will be smaller than it would be if you were to buy a similar home outright. The larger the share you buy, the cheaper your rent payments will be.

To buy a share, you can take out a mortgage or you can fund this through your savings. Most shares are funded by a mortgage though and many of Banks and Building Societies offer shared ownership mortgages. We can help you through this process by signposting you to independent mortgage advisors.

There are specific criteria that must be met to qualify to buy a shared ownership home:

• You cannot afford to buy a house on the open market.
• You are employed and can provide payslips for the last three months.
• You have at least two years’ audited accounts if you are self-employed.
• Your income fits the affordability criteria for the property you wish to buy.
• You have savings to cover the mortgage deposit, plus approximately £3,000 for legal, survey and mortgage fees (plus stamp duty if applicable).
• Your household income is below £80,000 a year.
• You have not been made bankrupt/had an IVA (Individual Voluntary Arrangement) and have been discharged for at least three years.
• You are not an existing home owner.
• The property must be your main place of residence.

A smaller deposit and lower monthly payments make it cheaper than buying a home outright. It is also likely to be cheaper than renting privately.

You will need to pay your mortgage and rent each month, as well as your usual household outgoings.

We can help you carry out an affordability check to make sure you can afford the monthly costs. If you don’t keep up your rent and mortgage payments you risk losing your home.

Your deposit is based on the percentage share you buy and is determined by which mortgage provider you use. It is very likely that your deposit will be cheaper than buying a home outright as you only pay it on the share you buy. So if your mortgage provider asks for a 5% deposit and you buy a 35% share of a £135,000 home, your share is £47,250 and you need a £2,362 deposit.

We will help you to make sure you are aware of all the costs up front. In addition to your deposit, as with all mortgages, you will need to pay legal and arrangement fees but we will make sure you know what these are before you commit to anything. Don’t forget that you will need to pay your deposit too.

You can sell your share of your home at any time. Just give us a call and we can talk you through the process. We will get your home valuated and market your home for a set period. If we haven’t found a buyer within this period, you can sell your home whichever way suits you best. The process for selling your home will be set out in your lease.

One of the great benefits of shared ownership is that you can buy more shares in your home. This means that if your financial circumstances or lifestyle changes, you can own a bigger stake in your home. We mentioned that this is called ‘staircasing’ and we can provide you with more detailed information about this when you need it. If you are not able to buy more shares, that’s fine. You can carry on being a shared owner for as long as you want.

Are you ready to staircase?

Complete our staircasing application form

This is great news! Keep an eye on our website for news about our next shared ownership developments.