Shared Ownership is a government supported home-buying scheme, providing the option to buy a share of real estate from a housing organization. It is an opportunity for buyers who do not own properties, to buy a share of a home in a new or resale complex.
Those, who are using Shared Ownership scheme, pay the mortgage just for their share of the home. They pay the rest of the lease to the housing organization. Consequently, a mortgage is needed for a considerably lower amount, and the amount for making a deposit is also much lower than in case of a direct purchase.
|Shared Ownership available on properties until 2023||Shared Ownership available on properties from 2022|
|Minimum deposit||5% of the share in the property||5% of the share in the property|
|Minimum share of property for sale||25%||10%|
|Minimum ‘Staircasing’||10% share annually||1% share annually, with reduced fees|
|Who pays for repairs||The buyer||The buyer receive support from his landowner for necessary repairs for 10 years|
|Exclusivity period for landowner to sell||8 weeks||4 to 8 weeks|
By choosing the part buy part rent scheme, buyers decide how much of the house they can afford. They then pledge at least 5% of the property value. After that, the buyer gets a mortgage that covers the rest.
Also, if desired, buyers can increase their share in the house at any time. To do this, you can use the staircasing process, which allows you to increase the portion up to 75%, and in some cases up to 100%. However, it is better to pre-negotiate these nuances with the housing association, since not all organizations allow full ownership.
Buckinghamshire Shared Ownership gives many people the opportunities to become the owner of the desired home. But before choosing this scheme, you need to make sure that you match the established criteria. To take advantage of the part buy part rent scheme, the purchaser needs to ensure that it complies with the following rules.
*Eligibility criteria may vary per housing association and therefore you should always check the exact criteria with the developer or housing association responsible for the exploitation of the property.
With the Shared Ownership Buckinghamshire scheme, you can increase your share of home ownership immediately or gradually. We mentioned earlier that this process is called staircasing. Before buying a home, make sure that this option is supported by your housing association. Usually, the contract implies that the process will take place using 10% tranches, although in some cases you can immediately become the owner of the desired part of the house. The cost of the additional part of the property depends on the actual price of the house. If you want to own 100% of the property, check the lease because some housing associations limit this right to only 75%. Therefore, always discuss these details with the developer.
How does staircasing work?
During the staircasing process, the buyer can get 1% of the house at a time as an additional share. It is essential to pay attention to the current market value of the house every time you purchase a share. To do this, you need to ask a certified appraiser.
It is also vital not to forget about other fees. Even though the additional part is already part of the existing property, the buyer needs to restructure the mortgage or pay Stamp Duty. The average amount of expenses during the staircasing process is around £2,000. But some individual factors can influence the price.
Shared Ownership houses for sale is an excellent opportunity to buy a property that you cannot pay in full right away. However, for this tempting scheme to work for you, you need to get familiar with all the aspects.
|+ Small deposit. You can purchase the apartment you want by paying a much lower mortgage than when buying the whole property.||- Unstable costs. Although rents are initially low, they can rise over time.|
|+ Staircasing. You can always raise your share of property ownership.||- Additional costs. You will also have to pay for land and property maintenance.|
|+ Easy sale. You can sell your piece of the property whenever you want.||- Repair limitations. To upgrade your apartment, you need a permit from the Housing Association.|
|+ Your choice. You decide for yourself how much of your home you want to own.||- Prohibition of subletting. The Housing Association may place restrictions on your renting out apartment.|