Shared Ownership: your invitation on to the property ladder

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13 Jun 2019

Shared Ownership: your invitation on to the property ladder

Author: Grace Watson

Thought you couldn’t afford your first home? Think again…!

The Shared Ownership scheme is a government-led initiative, designed with first-time buyers in mind. If you don’t think you can afford a large mortgage to fund your own home, Shared Ownership could be a great option for you. The scheme enables you to buy a share of your desired home – between 25 and 75 per cent – with as little as a 5% deposit, whilst paying a small rental top up on the remaining share. This option offers more flexibility than renting, whilst growing equity in a property thanks to capital growth. It also offers you the opportunity to purchase larger shares (eventually all of them, in some cases) if you’d like to, or when you can afford to.

Here’s an example of how the scheme works:

  • Total house price: £200,000
  • 50% share price: £100,000
  • Minimum 5% deposit: £5,000

With the Shared Ownership scheme, you can buy a newly built home or an existing one through resale programmes from housing associations. You’ll need to take out a mortgage to pay for your share of the property’s purchase price, or fund this through your savings. Shared Ownership properties are always leasehold with the housing association.

How do I buy a property through the Shared Ownership scheme?

Starting your journey to homeownership is really simple. You need to register with your local Help to Buy programme, which you can do online. Once you’ve completed your registration, you can start thinking about where you’d like to live, and what kind of property you might want to live in.

Before you start viewing potential homes, it’s important to work out just how much you can afford, so speaking to one of Romans’ dedicated Shared Ownership mortgage advisers is a great way to establish the budget you need to set. Once you have been accepted onto the scheme and you’ve confirmed the size of mortgage you can afford (if this is applicable), it’s time to start searching for your new home! You can do this via the Romans website, or property portals such as Rightmove and the Help to Buy website applicable for your constituency.

Am I eligible for the scheme?

There are some requirements, set by the Government, which you need to meet if you want to purchase a property through the scheme:

  • You must be over the age of 18
  • You must be a British Citizen, or have right to live and work in the UK
  • Outside of London, your annual household income must be less than £80,000
  • Inside of London, your annual household income must be less than £90,000
  • You should not already own a home. If you do already own one, you must be in the process of selling it
  • You must be able to show you are not in mortgage or rent arrears
  • You must be able to demonstrate that you have a good credit history (no IVAs or CCJs) and can afford the regular payments and costs involved in buying a home

Interested in finding out more about the scheme? Romans have a dedicated Shared Ownership team who are here to help you take your first step on to the property ladder. Call them today, on 033 3363 8603.

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