Shared Ownership is a scheme which enables you to buy a share of a property (normally 40% or 50% although higher percentages are available) subject to affordability and pay a subsidised rent on the remainder. The more of the property you own, the less rent you pay.
Everybody knows that buying property can be expensive. For example:
This means that monthly outgoings are split, part mortgage and part rent. Once you have bought your initial share, the remainder of the property can then be purchased as and when your circumstances change.
All shared ownership properties are leasehold and therefore usually attract a Service charge. In the case of houses, the Freehold would usually be transferred to you on 100% Staircasing.
The service charge includes buildings insurance as well as a charge for the cleaning and/or maintenance of any communal areas including car parks and so on. Maintenance of lifts (where installed) as well as communal grounds in the case of flats are also included. Sometimes, there is also a contribution to a management company and finally, a contribution is made to a reserve fund that would be available to fund any major works that may be needed in the future. For details about any particular development, please contact us.
There are a number of criteria which need to be considered when thinking about this option. The guidelines are as follows:
You must not be able to afford a suitable property that fulfils your needs on the open market.
You must have enough savings to cover solicitors fees and the general expenses of moving (approx. £2,500)
You must be a first time buyer or existing shared owner who need (due to size of family mainly) a larger property that is unaffordable on the open market.
Other applicants such as:
Divorced/separated couples can also be considered as long as they have sold their previous property.
Please note: Applicants who have been in mortgage or rent arrears within the last year are not eligible.
There is also an upper limit for your household income which you cannot exceed. This does change periodically so please check with us for the current restriction.
Once the initial share of the property has been bought, you can buy further shares at any time. This will be in multiples of 10% of the value at the time, usually meaning you can buy all of your home over a period of time. This is known as ‘Staircasing’
Some of our properties are subject to restrictions meaning you are unable to own more than 80%. This is to ensure that affordable housing remains available for local people forever. You will be notified at the time of application should the home you are interested in have such a restriction.
Your rent will be calculated as a percentage (normally 2.75%) based on the amount of your home which you do not own. Your rent is reviewed annually and you will be notified prior to any changes taking effect. Your lease will state the maximum amount your rent can be increased by and this is generally RPI + 0.5%.
The rent (and any service charge) is paid to Stonewater by Direct Debit. You will be asked to complete and return a signed Direct Debit Mandate as part of the contract paperwork prior to buying your home.
As part of the lease, shared owners are responsible for the upkeep of their own property. Communal areas within developments and in apartment blocks are looked after as part of the service charge, so any maintenance issues should be reported to Stonewater via our Customer Contact Team.
To find out how much the mortgage repayment would be, it is essential to seek independent mortgage advice to find the best deal possible.
There are other various costs involved when buying your new home, for example: legal fees, mortgage arrangement and valuation fees. Also purchasers are liable for stamp duty land tax in respect of shared ownership purchases. This can often be deferred and advice should be sought from your solicitor in respect of the options available to you.
Any other questions regarding stamp duty can be raised with the HM Revenue & Customs Helpline: 0845 603 0135. Alternatively, further information is available on the website:
As with any home ownership, once a property is purchased there are the day to day running costs to take into account such as, Council tax, utility bills, rent, service charge, mortgage and the costs of general maintenance and repair.
Interested in buying a shared ownership home?Find out more about shared ownershipFollow our simple three step guide
New Homes Team 023 80658 836
Commercial Services Team 01454 204065