Shared Ownership Week: are you inspired?
As Shared Ownership Week draws to a close, we look at the steps to take if you’re inspired to get on the housing ladder with a part-buy, part-rent deal.
Shared Ownership Week, which aims to raise awareness of the housing scheme, has publicised the real-life stories of people who have taken advantage of part-buy, part-rent deals.
So if you’re inspired to try to get on the housing ladder this way, what steps will you need to take?
Understand how shared ownership works
Shared ownership requires buyers to purchase between 25% and 75% of a property. They pay a subsidised rent to the housing association that owns the property on the rest, as well as their mortgage and any service charge and ground rent.
People then have the opportunity to gradually buy larger shares in the property. This process is called ‘staircasing’.
Know if you’re eligible
General eligibility requirements for shared ownership are:
- your annual household income must be less than £80,000 if you live outside London, and less than £90,000 if you live in London
- usually, you should be a first-time buyer
- you mustn’t be in rent or mortgage arrears
- you have to show you have a good credit history
Steps to shared ownership
To buy a shared ownership property, you’ll first need to save the deposit. One of the advantages of the scheme is that it generally requires a deposit of just 5% of the share you’re buying – much less than you’d need for an ordinary mortgage.
You’ll then need to find a shared ownership scheme in the area you’re interested in and apply. You can usually do this online – many shared ownership schemes advertise there.
Once you’ve viewed a property you like, you apply to the scheme. The housing association will get back to you to let you know if you’ve been accepted.
You will also need to pay a reservation fee.
As with any type of mortgage, shared ownership needs to work within your budget. You’ll complete an affordability assessment to see how much of the property you can afford to buy.
Once you know what share you’ll be buying and how much rent you’ll be paying, you’ll need to find a mortgage. A growing number of providers are offering mortgages on shared ownership properties.
You’ll also need to appoint a solicitor.
The housing association will then send you a memorandum of sale to give to your solicitor. Once the solicitor has all the documents, you can move to exchange.
The process between exchange and completion can be quick. Typically, you may be able to move into your new home within two weeks.