We share the ten key steps you will need to take in order to buy your first home.
Shared Ownership has been helping people onto the property ladder for the last 30 years. But how much do you know about the scheme?
What is Shared Ownership?
Shared Ownership provides people who don't currently own a home the opportunity to purchase a share in a property. The scheme is a cross between buying and renting, allowing the purchaser to buy a share in a property between 25% and 75% of the purchase price, paying rent on the remaining share. Some homes are available to purchase for a 10% share, depending on local conditions.
Why Shared Ownership?
Shared Ownership mortgages can provide access to home ownership that would otherwise be out of reach for many people. The deposit can be lower and there is also the option to buy further shares in the property (known as 'staircasing') in the future, providing buyers with the opportunity for full ownership down the line.
Other benefits include:
- Your deposit can be as little as 5% of the value of your share. For example, if you were purchasing a property with a 50% share of a £200,000 purchase price, the 5% deposit would be £5,000.
- You can gradually increase your share in the property when you can afford to and eventually own the property outright.
- Your chosen housing provider will be required to support you with the cost of essential repairs and maintenance for a period of 10 years.
Providing you meet the eligibility criteria, Shared Ownership can be an affordable way to get onto, or back onto the property ladder, and you may find you can buy a larger home than you would have otherwise been able to afford. What's more, you may find you can save some extra money each month, which you can later use to increase your stake in the property.
Who is eligible?
You will be eligible if;
You are aged 18 and over, but it is worth noting that some mortgage lenders will require the minimum lending age to be 21 years old.
In most cases you will also need to have enough savings to cover a minimum 5-10% of the share you are buying as a deposit. In addition you will need at least £2,500 to cover the associated costs of buying a home, such as solicitor's fees.
You have a gross household income of no more than £80,000 per annum or £90,000 per annum in London.
You do not currently own a home.
You are not in rent arrears and can demonstrate that you have a good credit history (no bad debts, no missed payments on credit agreements or County Court Judgements) and can afford the regular payments and costs involved in buying a home.
How do I get a Shared Ownership mortgage?
Not all lenders provide shared ownership mortgages, but many of the major banks and building societies (including Newbury Building Society!) do.
Housing Associations providing shared ownership properties will usually have a list independent financial advisors who can advise ona mortgage that is right for you. You can also use your own financial adviser to arrange a mortgage too.
Find out more about our shared ownership mortgages on our dedicated webpage. To book an appointment to discuss your mortgage needs, click here. We offer mortgage appointments online, over the phone, and in person.
Article reviewed May 2023.