Getting on the property ladder is tough, especially when there’s limited affordable housing. Shared ownership enables buyers to get their foot in the door through a part buy, part rent arrangement.
Alternative home ownership schemes often get stressful and confusing. That’s why Andrew Lee & Co Property Lawyers have created a brief guide to shared ownership in England - to help you get to grips with how the scheme works and how you might go about securing a shared ownership property. Keep reading to find out more!
How does shared ownership work?
A shared ownership scheme allows certain buyers to secure a mortgage to buy a portion of a property (between 25% and 75%) and pay rent on the rest. Shared ownership properties are usually leasehold, so there might also be monthly service charges and contributions to major maintenance works.
It is possible to gradually increase your share - this is called ‘staircasing’. The more of the property you own, the less rent you have to pay. You can just increase your share whenever it becomes affordable; there’s no pressure!
What are the eligibility criteria?
You qualify for shared ownership if your household income is £80,000 a year or less (£90,000 a year or less in London) and you can’t afford the full deposit and mortgage payments for a suitable home.
One of the following must also be true:
●You’re a first-time buyer
●You used to own a home but can’t afford one now
●You own a home and want to move but cannot afford it
●You’re forming a new household (e.g. after a divorce)
●You’re an existing shared owner and want to move
You can only buy some shared ownership homes if you have a connection to the area. This can include having close family living nearby, having already lived there yourself for a period of time, or being employed in the area.
If you own a home, its sale must be agreed by the time you apply for shared ownership and completed by the shared ownership completion date.
What is the process?
The usual process is as follows:
Register with the area’s Help to Buy agent.
Start viewing properties!
Undergo financial checks. If you pass, you’ll be offered the chosen property and should consult a mortgage advisor.
Appoint a solicitor. Every buyer needs legal representation - shared ownership is no different!
Memorandum of sale is issued. This contains all the key details of the purchase.
Once you’ve had your mortgage offer, paid your deposit, and contracts have been exchanged, you’ll be given the all-important move in date. On that date, after the money has been exchanged, it’s time to celebrate - the property is now yours!
How can a legal representative help?
Your solicitor will guide you through every stage and liaise with the other party’s legal team and your mortgage provider on your behalf. They’ll be able to advise you on potential issues and make sure you’re clear about the conditions you’re agreeing to. Their priority will always be to ensure your interests are protected at all times.
It’s important you have someone you trust on your side. Whether you’re in need of shared ownership assistance, mortgage advice, or anything else property-related,Andrew Lee & Coare here to help.Contact usto find out more about how we can help you secure your ideal home.
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