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Shared ownership schemes are designed as a form of low cost, affordable homeownership, whereby purchases obtain a share of a property-usually between 25-75% -often a new build property.
As an Estate Agent, we are often asked to sell such properties for vendors and here is a guide for prospective buyers to answer the questions we are often asked:
Who is it for?
It is designed for FIRST TIME BUYERS to take the first step on the property ladder, and a criteria includes:
- The buyers single/joint household income does not exceed £60000 per year.
- The buyers do not own another property so not available to investors.
- In some circumstances, divorcees may apply
- Housing association or council tenants
How do I fund it?
Mortgages are available as normal for shared ownership properties (subject to usual credit referencing and lender terms), and the Governments recent implementation of the help-to-buy mortgage guarantee does apply with most housing associations.
You will pay a subsidised rate of rent to the housing association on the share of the property that you don’t own. The rent is calculated on the value or the property, the higher the share purchased the lower the rent payable to housing association becomes. These costs are separate to any mortgage re-payments and service charge costs for leasehold properties.
Can I buy a bigger share?
Yes, further percentages will be able to purchase-called “staircasing” (under each housing associations terms), usually after a set period of occupation. You can continue to staircase until you own the property 100%.
The cost of further shares are determined by up to date valuations at each relevant time of applying for further share.
How will I sell the property at a later date?
As the price of the property increases or decreases so does the share you own! The housing association involved will have terms to remarket the property on your behalf as well as contacting your local Estate agent to see if they have a database of buyers for you.
Call us at James Laurence Estate Agents with further questions on 0121 604 4060 and check out the latest shared ownership properties we have available at www.jameslaurenceuk.com