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Shared Ownership

Shared ownership mortgages & schemes

What is Shared Ownership?

Shared ownership means you don’t own 100% of your home yourself. You buy just a percentage of the house which means you can get on the property ladder even when you can’t afford house prices in your area.

How does Shared Ownership work?

When you first buy your home under shared ownership, you choose how much you can afford. This is likely to be between 25% and 50% of the cost of the new home although you could buy 75% if you can afford it.

You take out a mortgage to buy your share and rent is payable every month on the remaining share. You’ll still need to put down a deposit but, as you’re buying less than the whole house, the deposit will be much smaller.

You’ll find not many lenders offer mortgages to people buying a shared ownership property and they might insist on a special shared ownership mortgage. Don’t let this put you off as we can help as we know which lenders to approach.

Should I buy my home under shared ownership?

Shared ownership is for people who can’t afford the cost of buying a whole house and wouldn’t otherwise be able to buy a home.

While this might sound an easy way to get on the housing property ladder, you need to think about it carefully. It is still a big financial commitment and, even though you don’t own all your house, you’ll be responsible for all the bills.

What happens after I buy a shared ownership property?

Once you’re living in your shared ownership house, you can choose to buy a bigger stake in it, all the way to owning 100% – if you can afford it and if the housing association allows 100% ownership. This is called stair-casing.

The price you have to pay to buy the next slice will reflect what’s happened to the value of your house since you first bought it. If the price has gone up, you’ll pay more. If it’s come down, you’ll pay less.

It’s a good way to climb the property ladder but be aware there are costs involved every time you buy another portion of your home. These are notably valuation fees and legal fees and you’ll be responsible for paying all of them.

If you want to sell a shared ownership home, you have to allow the housing association first refusal.

How do I buy a shared ownership home?

You buy shared ownership properties through the Help to Buy agent responsible for the scheme in the area where you want to live. You can contact the agent in the first place for help and advice about the scheme.

Although shared ownership mortgages are difficult to come by, our Mortgage & Protection Advisers can help you find one. They’re happy to answer your questions.

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