Shared Ownership is a government-backed home-buying scheme. With the help of this program you can purchase a share of real estate from a housing organization. Thus, buyers get the chance to become homeowners not only of new buildings but also of houses that are resold.
Using Shared Ownership scheme, purchasers are only required to pay the mortgage on their part of the home. They pay the rest of the cost as rent to the housing organization. In this case, the amount of the mortgage is significantly lower. The required deposit amount is also less than 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|
To put it simply:
*If desired, buyers can increase their share in the home. This process is called staircasing. Typically, this process can continue until the tenant owns 75% of the property. It is very rarely 100%. However, not all housing associations allow this, so if you plan to do this, you must first check this information with the organization.
Greater Manchester Shared Ownership gives many people the opportunity to become the owner of their desired home. But before opting for 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 has 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.
Buyers who participate in Shared Ownership Greater Manchester can gradually or immediately raise their shares of home ownership. As previously mentioned, this process is called staircasing. If you are going to take this opportunity, before concluding a Shared Ownership agreement, check with the housing association for the specific staircasing conditions for the property you are about to purchase. Usually, conditions stipulate that the process will take place in at least 10% tranches. But sometimes, purchasers can immediately get the piece of ownership that they want. The cost of the additional share depends on the price of their home at the moment of staircasing. To be able to take possession of 100% of the house immediately, check your lease. Some housing associations restrict the proportion that a buyer can acquire as a result of staircasing, for example, to 75%. Therefore, always check the conditions with the developer.
How does staircasing work?
When participating in the staircasing process, you can usually acquire 1% of the home at a time as an additional part. Also, the price of this share depends on the current market cost of the home. To get a reliable cost analysis, ask a certified appraiser who will advise the housing organization how much should be charged for the additional share in one of the Shared Ownership houses that you want to buy.
Furthermore, do not forget about other expenses. Even though the additional part is already part of the existing home, the purchaser needs to restructure the mortgage or pay Stamp Duty. The average sum of costs you will spend during the staircasing process is around £2,000. However, it can change according to several external factors.
Shared Ownership houses for sale are a great opportunity to buy a home that you cannot pay fully right away. However, for this tempting scheme to work for you, you need to become familiar with all the details.
|+ Low deposit. You can purchase the house you want by paying a much lower mortgage than when purchasing the entire property.||- Unstable price. Although rents are initially low, they can rise over time.|
|+ Staircasing. You can raise your share of home ownership anytime.||- Extra fee. You will also have to pay for land and home maintenance.|
|+ Unproblematic sale. You can sell your piece of the home at any time.||- Repair limitations. To upgrade your home, you need a permit from the housing association.|
|+ Your decision. You decide for yourself how much of your house you want to own.||- Prohibition on subletting. The Housing Association may place restrictions on your renting out house.|