Shared Ownership is a scheme that makes buying a home more affordable.
You can buy from as little as a 25% share in a property, then increase your shares after 1 year from your initial purchase, until you own 100% of the property. You will be charged rent on the share in the property that you do not buy. This reduces the deposit needed and may make your monthly repayments more affordable.
Shared Ownership is designed as a stepping-stone for buyers looking to completely own their own home.
Shared Ownership is designed to help people get on the property ladder who otherwise might not be able to afford to. You must meet the criteria below to be eligible to take part:
In some instances, priority for Shared Ownership properties is given to:
You can contact your local authority to find out if additional criteria apply in your area.
No. Shared Ownership homes are specific properties that are usually built by Registered Housing Providers or Housing Associations. They include new build Shared Ownership apartments and houses. It is also possible to purchase second hand shared ownership homes. These are called resales.
Yes, however you will need permission first. Your registered provider landlord will check that the works you are proposing meet building regulations and whether you need planning permission. If the improvements add value to the property, this may be taken into account if you sell your share or buy more shares.
No. You are unable to use housing benefit to buy a Shared Ownership property.
If you have a poor credit rating you are not automatically excluded from purchasing a Shared Ownership property. However, you may have difficulties obtaining a mortgage which will prevent you purchasing a property.
Yes, buying additional shares is a process called staircasing. You can buy additional shares until you own the property outright. The price of the additional share will be based on the value at the time of staircasing.
When you buy through Shared Ownership you enter into a lease agreement which is usually 125 years long.
Your solicitor will explain in detail what you are responsible for but broadly speaking your Registered Provider will deal with the upkeep of all communal areas, whilst you will be responsible for any repairs inside your property.
As with buying any home, there are costs involved in purchase a home through Shared Ownership:
You will need to pay a minimum 5% deposit of the share of the property you are purchasing. For example, if you are buying a 25% share of house valued at £400,000, the value of your share will be £100,000 and you will need to put down a deposit of £5,000.
You will need a solicitor or licensed conveyance professional to carry out the necessary legal work, searches and disbursements. You will need to have instructed a solicitor before your mortgage application can be submitted and it is important to check with your solicitor that they are approved to work for your mortgage lender. Solicitor’s fees are usually on a fixed cost basis.
You can choose to only pay any stamp duty on the share that you are purchasing or on the full value of the property as if you were buying outright. You don’t have to do this but if you do, it means that if you staircase your property to full ownership at a later date, you won’t have to pay stamp duty again. Your solicitor or other legal adviser can provide advice on the best option for your circumstances.
Mortgage arrangement fees and valuation fees may apply; please confirm with your mortgage broker on application. A mortgage broker should explain clearly what fees are charged and when, before they undertake any work on your behalf.
Other costs may be incurred, such as removal costs, but these can vary widely.
We recommend that you have between £3,000 and £5,000 in hand to cover all the fees and costs of moving, which includes the solicitors and broker fees.
It is important that you contact us as early as possible so we can discuss your options and work with you to find a solution.
You can sell your share of your home at any time and for any reason. An independent survey/valuer will value your home at your cost and advise you and your housing provider what the selling price should be based on the current market valuation of the home.
There may be restrictions requiring you to market in line with certain criteria to help other eligible purchasers. This will be made clear when you buy your home.
If your share doesn’t sell after an agreed period of time - usually eight weeks - you can instruct agents to sell your share on the open market.
You can also try and find a buyer for your property share but you may be liable to pay a fee if you find a buyer within this initial eight-week period.
You will benefit from any increase in the value of your property. However, you may also be affected by any fall in value should you want to sell.
Before you choose your perfect home, we recommend you speak to a mortgage broker to get an understanding of your budget. We’ve listed some of the costs of buying and living in a shared ownership home. Please see What ongoing costs should I factor when living in a Shared Ownership home?.
Find out if you’re eligible to buy through Shared Ownership. Please see Am I eligible to buy a Shared Ownership home?.
You will complete a Reservation Agreement form to reserve your home and will be asked to pay reservation fee to secure your new home for an agreed period. You will also be asked to speak to our Independent Mortgage Advisors on the phone.
You will need to appoint a legal advisor to act on your behalf who will be responsible for the transfer of ownership of the property. We can provide a panel of solicitors to you to make your own choice or you may wish to use your own.
The next step is to apply for a mortgage. It is important you instruct your solicitor and mortgage advisor promptly after reservation.
You will sign the draft contract when your mortgage offer has been received and your solicitor is satisfied with the details of your purchase. You will be required to pay your solicitor the exchange deposit.
On the day of completion your solicitor will transfer the balance of the purchase price monies to Rosewood Housing. Once this has been received our Sales Advisor will let you know and arrange to meet you to walk you through your new home and record the meter readings.
Each month you will make repayments on your mortgage until the time the mortgage has been repaid. The amount you will pay towards your mortgage will depend on the value of the share you purchase, the deposit you put down, your mortgage term and the interest rate.
The amount of rent will depend on:
- The share you buy
- The value of your property when you buy it
You will pay rent on the proportion of the property you did not purchase, currently payable at 2.75% of the unsold equity. For example: if you buy a 40% share in a property worth £400,000 the equity you would pay rent on is £240,000. Your annual rent would be 2.75% of £240,000: £6,600 a year or £550 a month. In accordance with the terms of your Shared Ownership Lease your rent can be reviewed annually. You will be given at least four weeks’ notice of any increase in your rent.
You will have to pay a service charge each calendar month. This charge is your contribution towards maintenance and repairs to common areas of the development and building insurance. We specify the service charge applicable in your lease document. In accordance with the terms of your Shared Ownership Lease your service charge can be reviewed annually.
Your service charge includes building insurance but you are responsible for contents insurance. Contents insurance isn’t compulsory but is recommended.
You are required to buy the maximum share you can afford and sustain. Your Financial Advisor will assess your income and expenditure to work this out at the start of the process.
To search for properties in your area you can either visit the Share to Buy website in London or the Help to Buy website outside of London.
As the homeowner, it is your responsibility to repair and maintain your new home. Rosewood new homes come with a guarantee that will cover most defects in your home for the first two years and then major defects for the following ten years.
Shared Ownership is an affordable way of getting onto the property ladder
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