How does Shared Ownership Work?
The scheme allows you to purchase a share of a property from a social landlord, usually a housing association. The share you purchase is funded by a mortgage, which you will need to arrange with a bank or building society. The remaining share you do not own and is rented from the social landlord.
The size of the share to be purchased will depend on your income and savings. Normally applicants buy a 50% share but you may purchase a smaller or larger share (to start with, you can buy as little as 25% or as much as 75%). The higher the share you purchase the less rent you will have to pay. Later on, if you wish and can afford to do so, you can buy a further share.
When you purchase through shared ownership, the social landlord will grant you a lease, which sets out your rights and responsibilities.
We aim to make access to shared ownership information as easy to understand as possible for everyone. The following link will take you directly to a website which provides shared ownership information to support people with learning disabilities.
Housing Options: Shared Ownership|
What does the shared ownership lease entitle me to?
Whether you buy a house or flat under shared ownership terms, the social landlord will grant you a lease usually for 99 years. It will entitle you to live in your home as an owner-occupier. It will also entitle you to buy further shares in the property and sets out how you can do this. It also states that you can sell your property.
Other points covered in the lease set out your responsibility for repair and payment of rent and service charge. Although you have not bought the property outright, you will have the normal rights and responsibilities of a full owner-occupier. You are advised to take your own legal advice on the terms and conditions of the lease.
Who Qualifies for Shared Ownership?
Usually first time buyers, with priority given to:
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Existing public sector tenants vacating rented accommodation.
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Those on a waiting list of a registered social landlord or local authority.
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People moving to an area with higher housing costs in order to take up employment.
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Others in housing need who are unable to afford the costs of full ownership.
How much will it cost?
It is important that you give careful thought to the costs and responsibilities of buying your own home. The following table provides an insight into both the initial costs that you will have to consider and the running costs of having your own home.
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Initial Costs
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Running Costs
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Survey
Survey
Legal Fees
Stamp Duty
Deposit (if required)
Mortgage Indemnity Insurance
Removal Costs
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Mortgage Repayments
Rent
Council Tax
Repairs, Insurance and Management Charge*
Heating and Lighting Bills and Water Rates
Fittings and Furniture
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Repairs, Insurance and Management Charge*-
If your home is a house, you will be responsible for all the repairs and redecoration both internally and externally. The social landlord will insure the structure of your home and you will have to pay a small management charge to cover this and to help meet the costs of rent collection.
Can I make improvements or alterations to my home?
If you wish to improve your home or make structural alterations to it, you must request the social landlords written agreement to what you want to do.
What do I do when I want to sell?
You may sell at any time but you must tell the social landlord in writing that you want to move. You can either sell the part that you own or you can buy the remaining share and then sell the property outright. You will benefit from any increase in the value of the property according to the share you own, but you should be aware you may be affected by any fall in value.
Unless you own the property outright, clauses in the lease may enable the social landlord to nominate prospective buyers and to restrict the sale price to an independent valuer’s valuation. The reason for this is that they wish the property to remain available to the people for whom shared ownership is intended.