What is shared ownership?
Shared ownership is a part rent, part buy scheme whereby instead of purchasing a home outright, you purchase a share of your home and then pay rent on the remainder. In most cases you can buy extra shares later on if you wish, until you own your home outright. It is a way of bridging the gap between renting and owner occupation.
Who can apply?
You must be unable to afford to pay the full market price for a home, but have sufficient income to secure a mortgage on part of a property and pay rent on the rest. In addition you must demonstrate a 'housing need'.
How do I apply for Shared Ownership properties?
You need to complete an online housing application form via the Gateway to Homechoice (opens in new window) website. You also need to apply to Orbit First Step who is the Homebuy Agent for this area. They have a range of Homebuy options and also hold a register of people interested in shared ownership. They can be contacted on 03458 50 20 50 or online at Orbit Homebuy Agents (opens in new window).
What’s the minimum share?
The minimum share varies with each scheme. Normally the minimum will be either 25% or 50%.
How much do I pay?
Mortgages are available from many banks and building societies. The interest rate you will have to pay varies depending upon which bank or building society you borrow from. Similarly, solicitor’s fees for which you will be responsible vary, so it is worthwhile shopping around.
You will be required to pay rental on the share you do not own. The rent will be reviewed annually.
As well as being able to raise a mortgage, applicants will be liable for other costs. These include:
- Deposit - To register your interest in a property, the payment of a reservation fee or deposit will be required. This amount will then be deducted from the purchase price upon completion. This is normally a percentage of the value of the property.
- Legal Costs - You will need to instruct a Solicitor to act on your behalf. It is advisable to request an estimate of the charges prior to taking up their services. There will be fees payable to the Land Registry. Also, you may be liable for stamp duty and should take legal advice.
- Valuation costs - The mortgage lender will require a valuation to be made of the property you intend to buy. You will be directly responsible for any costs that will be involved in this. Your mortgage lender may charge an administration fee for which you will also be responsible.
As well as these costs you will also need to consider the other costs associated with setting up your own home for example survey costs, removal costs and furniture and fittings.
When can I buy extra shares?
This depends upon the scheme. Your mortgage payments will increase, but your monthly rent will decrease as you acquire more shares in your home.
If you are interested in purchasing shares in a Council owned property, or are seeking other information on Council owned property please contact us.
Please note, that in many cases Shared Owners will not be able to buy more than an 85% share in their property. This is to ensure that these homes will continue to be available to local people on a Shared Ownership basis in the long-term.
What will I be liable for as an owner under Shared Ownership?
It is important to recognise that although you would be paying some rent as a shared owner, this does not mean that you would be a tenant. You will be an owner-occupier and have the full responsibility for repairs and maintenance of the home you have bought.
You will have to arrange and pay the costs of repairing and looking after the property both internally and externally, including the services such as gas and electricity.
You will also be liable for the following:
- Paying the rent on the share owned by the Housing Association
- Repairing the interior of the property and the fixtures and fittings and meeting the full cost of this work
- Keeping the structure and exterior of the property in a good state of repair and meeting the full cost of this work.
- Not altering the exterior of the property or extending it without the consent of the Housing Association.
- Not altering the interior of the property without the consent of the Housing Association.
- Letting the Housing Association have access to inspect the property after reasonable notice.
- Not reselling the lease to another party or subletting the property without the consent of the Housing Association and allowing the Housing Association to nominate the new purchaser
What will the Housing Association be responsible for?
Allowing the shared owner to enjoy the property
- Keeping the building structure insured against loss or fire
- Maintaining and cleaning any communal areas and grounds
(This may attract a service charge payable to the Housing Association)
What happens if I want to move?
You can sell your home whenever you like. You must notify the Housing Association in writing that you want to do so. This will help you as the Housing Association will put forward people who are interested in buying a Shared Ownership home. This will save you estate agent fees.
In rural areas some homes have restrictions on them to ensure they are available to local people, so you will, in the first instance, only be able to sell to local families who are on the Housing Register.
Because you will own a fixed percentage of the value of your home, when you sell you will benefit from a proportion of any increase in the value of the property. Should the value fall, you will suffer the loss based on the percentage of the property you own.
Mid Suffolk District Council
131 High Street
Telephone: 01449 724760
Fax: 01449 724780
SMS Text Mobile: 07827 842833 (please note the SMS Text Mobile number replaces the old Minicom system for customers with hearing difficulties)