Are you hoping to purchase a property but unable to commit to the whole purchase price?
The Homes and Communities Agency Shared Ownership scheme offers the chance for you to buy a percentage share of your home and pay a reduced rent on the remaining share. You would also have the opportunity to buy more shares later on.
What is Shared Ownership?
The Shared Ownership scheme allows you to purchase between 25-75% of the property with the remaining share owned by the Home and Communities Agency (“HCA”). You will own the property on a leasehold basis and pay rent to the HCA for the share that they will still hold.
Am I eligible?
To qualify for the scheme, you must be purchasing a new build property or an existing home through a resales programme from a housing association or local authority. Your household income must also be lower than £80,000 outside of London or £90,000 in London.
You may fund your share of the purchase through savings or through a mortgage. If you do choose to purchase with a mortgage, the scheme gives you the flexibility to purchase with a very low deposit.
Paying rent on your property
If you choose to use the Shared Ownership scheme, you will effectively be paying rent on the remaining share of your home at a reduced rate. This means if you obtain a mortgage, you will be paying both the mortgage and a proportion of rent each month. The amount of rent payable will depend on the purchase price of your property and the percentage share of which the Home and Communities Agency own.
You can choose to purchase further shares and have the opportunity to own 100% of your property should you be in a position to do so in the future.
I am interested in the scheme, what should I do now?
If you believe you qualify for the Shared Ownership scheme, contact the housing team at your local council or housing association to find out which properties are available under the scheme. If you are over the age of 55, you may benefit from the Older People’s Shared Ownership scheme.
You may wish to seek the advice of an independent mortgage broker as not all banks and building societies will lend under the shared ownership scheme and you will therefore require a specialist mortgage.
If you are thinking of purchasing a property under the Shared Ownership scheme or you are considering any other Help to Buy schemes, contact our Conveyancing Team on 0113 244 9931.