What is Shared Ownership?

Shared Ownership is a Government-backed scheme provided by Housing Associations and aimed at first time buyers who want to get a step onto the property ladder. Launched in April 2006, it aims to help first time buyers who would not be able to afford to buy a property on the open market.

Shared Ownership is a part buy / part rent scheme where you buy a share of the property and pay rent on the share you don’t own. For example, if the full market price of a home was £250,000, Shared Ownership allows you to buy a 30% share for £75,000.

It is designed as a stepping stone to completely owning your own home, allowing you to buy further shares of your property (which is called Staircasing) when you can afford to.

Benefits of Shared Ownership

Buying a home in the current market can be very difficult for many people. Shared Ownership makes it possible to buy a property which otherwise would not have been affordable. You usually buy an initial share of 30% to 75% of the full value of a property, and you’ll need to take out a mortgage to pay for your share of the home’s price. You will then pay a subsidised rent on the share you don’t buy, and there will also be a monthly service charge payable.

Shared Ownership has many benefits, particularly for first time buyers in London where property values are so high. These benefits include the possibility for:

  • A smaller deposit
    When buying through Shared Ownership the minimum required deposit is usually just 10%. So if you are buying a 30% share of your property for £79,500 then you would only need £7,950 for a deposit.
  • Lower monthly costs
    Because rents are subsidised, your combined monthly mortgage and rent payment can work out cheaper than the mortgage payment when buying outright, and often it is not much more than renting on the open market
  • Homeownership
    You will own part of the value of your home, rather than paying rent with no return.

Shared Ownership has already helped over 52,000 first time buyers in London alone as it continues to become a popular alternative to buying a property on the open market. Take a look at Family Mosaic’s Shared Ownership case studies to see how it has benefitted others already.

Shared Ownership Eligibility

Eligibility will vary depending on which development you are looking to buy at, the property size and whether there any criteria are imposed by the local authority. But there are some general, over-arching criteria that you must meet for every scheme:

  • Your total household income needs to be no more than £71,000 per annum for one and two bedroom homes or no more than £85,000 per annum for family sized homes (three or more bedrooms). A lower income threshold (£60,000) is applicable for developments outside London boroughs.
  • You must either be a first time buyer or:
  • Be a newly forming household; for example, starting again after a relationship break up.
  • Be relocating for work purposes to an area where property prices do not allow you to buy a home suitable for your family size.
  • You must not currently own a home anywhere in the world, unless a court order forces you to remain on the deed of a property where your children reside.

For a comprehensive list of the eligibility criteria, please visit the Shared Ownership eligibility page by Family Mosaic.

Changes to Eligibility

As of 1 April 2016, there will be some changes to the eligibility criteria stated above. Firstly, the household income threshold will be increased to £90,000 for any number of bedrooms.

In some circumstances at present, applicants are only able to apply or receive priority if they live or work in the same London borough as the development. Under the new eligibility criteria, applications will be open to anyone, irrespective of where they currently live or work.

Speak to an expert

If you have any further questions about Shared Ownership and wish to speak to an expert, please contact Family Mosaic by email to [email protected] or visit www.familymosaicsales.co.uk for more information and to see our latest developments.

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