Q. I’d love to get my foot on the property ladder and particularly interested in finding out more about shared ownership schemes as these seem like a more affordable way to buy especially since the banks lending criteria is so much tougher these days, can you help?
A. Shared ownership is a very good idea especially if you are struggling to buy outright which is perfectly understandable in this difficult market. The scheme is provided through ‘HomeBuy agents’, who will decide if you can buy a home this way. HomeBuy agents are housing associations that have been authorised to run schemes for people who have difficulty buying a home. You do however have to fit the following criteria if you want to purchase a home through the shared ownership scheme.
- your household earns £60,000 a year or less
- you can’t otherwise afford to buy a home in your area
A household is the number of people who are buying the home. For example, a household might be you alone or you and your partner.
Shared ownership is open to:
- people who rent council or housing association properties
- ‘key workers’ in the public sector, e.g. fire officers who work in the area
- first-time buyers (you are a first-time buyer if you haven’t owned a home before)
You can also get help through the scheme if you previously owned your own home, but can’t afford to buy one now. Through the scheme you pay for a share of between 25 per cent and 75 per cent of the home’s value. You can decide how large a share you purchase .The housing association owns the remaining share of the value of your home. You will then pay rent on the landlord’s share. The rent would be up to 3 per cent of the share’s value. Shared ownership properties are always leasehold homes. This means you own them for a fixed period of time, usually between 99 and 125 years. When you buy your home, you become the owner of the lease. The housing association will grant you a lease for the fixed period, which also sets out your rights and responsibilities, and those of the landlord. Under the scheme you can sell your home at any time, but you must tell the housing association in writing. If you own a share of your home, the housing association has the right to find a buyer for it. If you own 100 per cent of your home, you have the authority to sell it yourself. If you decide to put your home up for sale, the housing association has the right to buy the property back first before offering it out to the open market. This is known as the ‘right of first refusal’. The housing association has this right for 21 years after you fully own the home. If you’d like to buy a home through a shared ownership scheme, you need to contact the HomeBuy agent in the area where you want to live. Each HomeBuy agent has an application form for each scheme, which you will need to complete.