Frequently Asked Questions
What is Shared Ownership?
Shared Ownership gives first time buyers and those that do not currently own a home the opportunity to purchase a share in a new build or resales property.
The purchaser pays a mortgage on the share they own, and pays rent to a housing association on the remaining share. Because the purchaser only needs a mortgage for the share they are purchasing, the amount of money required for a deposit is usually a lot lower when compared to the amount that would be required when purchasing outright.
The purchaser has the option to increase their share during their time in the property via a process known as ‘staircasing’, and in most cases can staircase all the way to 100%. In this instance, the shared owner will no longer pay any rent, just their mortgage along with any service charges and ground rent.
Why buy a Shared Ownership home?
Shared Ownership is essentially for people who would like to own their own home but can’t afford to buy on the open market. Shared Ownership costs are usually lower than other housing options for a number of reasons:
- The rent is less than the rate charged on the open market and usually charged at 2.75% of the property value per annum.
- You can start with a little as 25% share in many cases.
- Your deposit will be 5-10% of the price of the share, not of the full market value of the whole property.
- Stamp Duty Land Tax (SDLT or simply ‘stamp duty’) can generally be deferred until your share reaches 80%.
Shared Ownership properties can often be found in private developments as a certain number of Shared Ownership homes will often be required as a part of the planning permission for a development. This can help to put affordable housing in the heart of sought-after areas!
How to buy a Shared Ownership home
Register with us today and we can help you find a Shared Ownership property.
Getting started with Shared Ownership is not as complicated as people might think. First of all. you should check if you are eligible. Please note that in addition to the general eligibility rules, there might be some specific requirements for some properties and local boroughs have their own terms regarding priorities and affordability. These will be outlined on each listing.
When you have chosen a property, you will need to make sure you have the required deposit and get a mortgage.
When I part-buy/part-rent my home, what am I buying?
Effectively you are buying a leasehold house or flat, and this will be either a new build or resale home. However, as you cannot presently afford to buy a home outright, you are paying rent on the portion that you can’t afford.
You have the option to buy further shares – up to and including 100% ownership in most instances – if and when you choose to do so. The price of buying further shares (or ‘staircasing’) will be based on an independent valuation at the time that you purchase the further share. You can find out more about the process of buying additional shares in our staircasing guide.
What are the eligibility rules for Shared Ownership?
There are some general eligibility requirements that anyone wishing to buy a Shared Ownership home must meet. The general eligibility criteria for Shared Ownership is as follows:
- You must be at least 18 years old.
- Outside of London your annual household income must be less than £80,000.
- In London, your annual household income must be less than £90,000.
- Shared Ownership purchasers are often first time buyers but if you do already own another home, you must be in the process of selling it.
- You should not be able to afford to buy a home suitable for your housing needs on the open market.
- You must show you are not in mortgage or rent arrears.
- You must be able to demonstrate that you have a good credit history (no bad debts or County Court Judgements) and can afford the regular payments and costs involved in buying a home.
You should have savings or be able to easily access at least £4,000 to cover the costs of buying a home (this is a guideline figure – the actual amount may vary).
You will also need access to the deposit amount required. For Shared Ownership, this will usually be 5-10% of the equity share you are buying.
Can I purchase any property on a Shared Ownership basis?
No, Shared Ownership is only available for specific, purpose-built properties.
Does Shared Ownership mean sharing with another person?
While you’re welcome to buy with another person, Shared Ownership does not mean you have to share the ownership of the property.
What is a resale Shared Ownership property?
Resale homes are a type of property that you can purchase through the Shared Ownership scheme, and offer some differences from New Build homes.
What size share can I purchase?
The share you can purchase can vary depending on the housing provider and your financial situation.
Who is responsible for repairs of my Shared Ownership home?
This will depend on factors such as whether you own a house or a flat, and if the repairs are internal or related to the structure of the property.
Can I increase my share of my Shared Ownership property to 100%?
You can increase your share through a process known as ‘staircasing’, however there may be some restrictions on this.
What is Staircasing?
Usually once you have lived in your home for a certain period of time as the shared owner (depending on the terms of your lease), you can buy further shares in your property. This process is known as staircasing, enabling you to own a greater proportion of your home. If you bought a resale property you can buy further shares too (depending on the terms of your lease).
The greater the share you buy in your home the less rent you will pay to your Housing Association. If you staircase to 100% you become an outright owner, and you will no longer need to pay rent.
You may acquire additional shares in your property at a price equal to the relevant proportion of the current full open market value of the property. For example: if your property is valued at £200,000 and you want to buy an additional 25% share, the purchase price of the extra share would be 25% of the valuation, which is £50,000.
What happens when I staircase to 100%?
You will no longer have to pay and rent, although you will need to continue paying service charges.
If you wish to sell your property, you will not have to give Origin Housing the opportunity to sell the property. If the property is a freehold you may be able to buy the freehold from Origin Housing.
What are the benefits of Staircasing?
You will own more of the property and pay less rent. You will therefore obtain greater value from any increases in value the property may gain from.
Can I sell my home?
Yes, you can sell your shares at any time. If you own less than 100% you will need to let Origin Housing know, and they will have a defined period of weeks to try and sell the property. Please see your lease agreement or contact us to find out more.
If you own 100% you will be able to see your property without letting Origin Housing know.
Are there any restrictions?
There are no restrictions in the majority of cases however we would recommend in the first instance that you refer to your lease. This may require assistance from your legal representative.
How do I buy more shares?
If you already own a Shared Ownership home and want to buy more shares – possibly right up to 100% outright ownership – we can help. Contact us today to find out now how much you can buy and how much it would cost.