A guide to shared ownership homes

A Guide to Shared Ownership Homes

What is shared ownership?

Shared ownership is a government-backed scheme that enables you to buy a share of a property, usually between 25% and 75%, and pay rent on the remaining share that you don’t own. This scheme is designed to help individuals who are unable to afford to buy a property outright.

If you’re considering shared ownership as an option, Lynwood Solicitors can provide you with expert legal advice and representation throughout the process. For a comprehensive guide on how shared ownership works, you can refer to A guide to shared ownership homes.

Understanding the eligibility criteria

Before embarking on your shared ownership journey, it’s important to understand the eligibility criteria. To qualify for shared ownership, you must meet the following requirements:

  • You should be a first-time buyer or a previous homeowner unable to afford a mortgage for a suitable property.
  • Your annual household income should be less than £80,000 in London or £60,000 outside London.
  • You must demonstrate that you can afford the costs involved in owning a home, including a mortgage and rent.
  • You should have a good credit history and be able to obtain a mortgage.

It’s worth noting that different housing associations and developers may have additional specific criteria for their shared ownership properties, so it’s essential to check the requirements for the specific property you are interested in.

The process of buying a shared ownership home

Buying a shared ownership home involves the following steps:

Finding a suitable property

You can search for shared ownership properties on various websites, including housing association websites and property portals. Once you have found a property you are interested in, you will need to contact the relevant housing provider.

Arranging a mortgage

Before making an offer on a shared ownership property, you should obtain a mortgage agreement in principle from a reputable mortgage lender. This will help you determine how much you can borrow and afford for your share of the property.

Legal representation and conveyancing

At this stage, it is crucial to engage a specialist property solicitor, such as Lynwood Solicitors, who can guide you through the legal process of buying a shared ownership property. They will conduct the necessary searches, handle the contracts, and ensure that all legal requirements are met.

Reserving the property

Once you have chosen a property, you will need to pay a reservation fee to secure it. This fee is usually deducted from the final purchase price.

Staircasing and selling your share

Over time, your financial circumstances may change, allowing you to buy a larger share of the property. This process is known as staircasing and can be done in increments until you eventually own the property outright.

If you wish to sell your shared ownership home, you will need to inform the housing association or developer who will have the opportunity to find a buyer for your share. If they are unable to find a suitable buyer, you can opt to sell it on the open market.

Advantages and considerations of shared ownership

Shared ownership offers several advantages, including:

  • Access to homeownership for those who can’t afford to buy a property outright.
  • Ability to increase your share in the property over time.
  • Potential for profit if the property value increases.
  • Flexibility to sell your share or the entire property.

However, it’s essential to consider the following factors when contemplating shared ownership:

  • You will be responsible for ongoing costs, such as rent, mortgage repayments, and maintenance.
  • You may face limitations when making alterations to your property.
  • Selling a shared ownership property can be more complex than selling a property you own outright.

If you have any further questions or require legal advice on shared ownership, Lynwood Solicitors is here to help. Contact us for expert guidance throughout the process.

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