What is Shared Ownership?
Shared Ownership is a government backed Part Buy/Part Rent scheme designed to help you take that first step on the property ladder. The properties sold under this scheme are usually new build apartments or houses; you can purchase shares from 25% up to a maximum of 75% on the initial purchase.
As this scheme is designed to be the first step onto the property ladder you cannot own another property or land in the UK or abroad.
All applicants are expected to purchase the maximum share they can afford; this will be dependent on your income and savings which you will need for your deposit, and any financial commitments you may already have. You will need to use some of your savings for legal fees and the rest of your savings will be required for your deposit. You will need to arrange a mortgage for the share you want to buy you will also have to pay a discounted rent to your landlord on the share you don’t own and a service charge
Am I eligible?
If the following statements apply to you then it is very likely that you will be eligible:
- Your annual gross household income is less than £90,000 in London
- You do not currently own a home
- You have no outstanding credit problems
- The monthly mortgage, rent and service charge payments on the property are less than 45% of your household income after tax
Some other restrictions may apply on certain properties such as a local residency requirement or minimum household size.
Your general eligibility can be confirmed once you have filled in the application form.
Financial assessment and property suitability
We will then assess both the make-up of your household and your affordability in relation to the home you are interested in.
- Regarding affordability we must be sure that your current income is sufficient to sustain the financial commitment involved. Please note that we will carry out a credit search before offering you a property.
- We require and will arrange for a specialist financial advisor to contact you and carry our an affordability assessment. This will help us establish the share you will be required to buy.
What is leasehold?
Leasehold ownership of a flat is simply a long tenancy, the right to occupation and use of the flat for a long period – the ‘term’ of the lease. This will usually be for 99 or 125 years and the flat can be bought and sold during that term.
The leasehold ownership of a flat usually relates to everything within the four walls of the flat, including floorboards and plaster to walls and ceiling, but does not usually include the external or structural walls.
The structure and common parts of the building and the land it stands on are usually owned by the freeholder, who is also the landlord. The freeholder is responsible for the maintenance and repair of the building. The costs for doing so are recoverable through the service charges and billed to the leaseholders.
A leasehold ownership of a house usually relates to the whole building both internal and external and possibly a garden and driveway. Typically, a leaseholder of a house would be responsible for the repair and maintenance of the whole building.