SHARED OWNERSHIP

A great way to get on the housing ladder. Home ownership that combines rental with owner-occupation.

Shared ownership mortgages combine rental with owner-occupation. They were introduced in the early 1980s and were developed extensively by housing associations in collaboration with local authorities and private lenders.

Shared ownership was introduced to help people who cannot afford to buy a home outright. Through shared ownership you buy a share of the property and pay a rent on the remaining share. After time you may buy further shares and eventually own your home outright if you want to.

Remember that house prices can go up or down. This means that sometimes you might pay more for buying additional shares or have to sell at a price less than you originally paid.
What is a registered social landlord?

Registered social landlords are non-profit making organisations who provide and manage homes for rent and sale for people in housing need who cannot afford to rent privately or buy.

A social landlord can be a housing association, a housing society or a non-profit making housing company. Most of these landlords provide housing with the help of public money given by the Housing Corporation or a local authority; in some cases, the social landlord may provide housing using its own money.

Where does the Housing Corporation fit in?

The Housing Corporation was set up by Parliament in 1964. Their job is to fund homes built by registered social landlords from money they get from central government. They also make sure that the money is well spent and provides homes of a good standard for those people with the greatest need for housing.

Social landlords must be registered with the Corporation before they can be given public money.

Who can buy through the shared ownership scheme?

The scheme is intended for people who cannot afford to buy a suitable home in any other way. They must be in housing need and be unable to afford outright purchase. Priority will normally be given to existing public sector tenants or those on local authority or social landlords waiting lists.

Although you have not bought the property outright, you will have the normal rights and responsibilities of a full owner-occupier. You are advised to ask your legal adviser as well as the social landlord if there are terms you do not understand.

Joint Ownership

Up to four people can become joint owners but all joint applicants must individually and jointly meet the eligibility criteria. Ask your mortgage broker, solicitor/licensed conveyancer to advise you.

Types of property allowed?

Shared ownership homes may be new or renovated flats or houses which are sold by social landlords. Prices vary according to location but are expected to be within the means of those people who cannot afford the prices of properties available for sale in the open market.

The scheme allows you to purchase a share of a property from a social landlord, usually a housing association. The share you purchase is funded by a mortgage which you will need to arrange with a bank or building society. The remaining share you do not own is rented from the social landlord.

The size of the share to be purchased will depend on your income and savings. Normally applicants buy a 50% share but you may purchase a smaller or larger share (to start with, you can buy as little as 25% or as much as 75%). The higher the share you purchase the less rent you will have to pay. You will also have to pay a service charge when you buy a flat. Later on, if you wish and can afford to do so, you can buy a further share.

When you purchase through shared ownership, the social landlord will grant you a lease which sets out your rights and responsibilities.

What does the shared ownership lease entitle you to?

Whether you buy a house or flat under shared ownership terms, the social landlord will grant you a lease usually for 99 years. It will entitle you to live in your home as an owner-occupier. It will also entitle you to buy further shares in the property and sets out how you can do this. It also states that you can sell your property.

Other points covered in the lease set out your responsibility for repair and payment of rent and service charge. Although you have not bought the property outright, you will have the normal rights and responsibilities of a full owner-occupier.

If you have any questions on how the scheme operates ask the social landlord selling the property. You are also advised to take your own legal advice on the terms and conditions of the lease.

If you would like to talk to an adviser about a shared ownership mortgage please complete the relevant enquiry form.

Mortgage Enquiry Form