Shared Ownership - how and why it works...

Thursday 04 January 2018

When it comes to finding a home, it's not just a black and white decision to rent or buy. With a range of ways 'in between', there are other options you may not have thought or heard of. 

Shared Ownership could be the key to a great new home at a price you can afford - get on the property ladder and own your home in stages.

What exactly is Shared Ownership?

Shared Ownership is a Government backed part-rent, part-buy scheme primariily for first time buyers although other purchasers may qualify too.

You buy a share of a property - usually between 25% and 75%, depending on your budget - and pay rent on the remainder, which is still owned by a housing association such as Riverside.

Shared Ownership - buy your home one step at a time

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What if I want to own outright myself?

In most cases you can buy more shares from the housing association in the future and eventually own 100% of your home. This is known as 'staircasing' and is designed to help you increase the portion you own when it suits you financially. The more of your property you own, the less you pay in rent.

Am I eligible?

If you have a household income below £80,000 per year and the monthly mortgage, rent and service charges of the home are less than 45% of your monthly take home income, you should qualify.

The scheme is to help first time buyers (or people buying after a relationship breakdown), but speak to the housing association to discuss your own circumstances to see if you'd be eligible.

What are the costs involved?

You'll be buying a percentage of the property, so you will most likely need to take out a mortgage for this amount and make the monthly repayments. You pay a monthly rent on the remainder to the housing association who own the other shares. There is also a monthly service charge which covers building insurance and if there are any shared areas, in flats for example, the maintenance of things such as lifts and car parks, and cleaning.

That sounds like a lot to pay out - isn't it cheaper just to rent or buy?

Surprisingly, no. The rent you pay is reduced, so the combined monthly costs are usually around 20% less than buying the same property outright. It often works out cheaper than renting it privately too.

Aren't the properties built to a 'cheaper' standard?

Not at all. In fact many people are surprised by the high quality of Shared Ownership homes.

Shared Ownership properties are built to Homes England government standards and designed to high specifications. This means that Shared Ownership homes are sustainable and often run at a lower cost in terms of energy bills than other new build properties. Many of the associations that build Shared Ownership schemes go the extra mile, providing interior features such as heated towel rails and garden landscaping that would cost extra from a commercial housebuilder. Affordability doesn't mean compromising quality!

Can I make my own home improvements?

Yes, you can decorate and carry out any general home improvements you like. For bigger jobs like changing a kitchen, you should speak to the housing association first as they still own a portion of the property.

How involved is the housing association?

Day to day it's no different than if you owned your home outright. Riverside Home Ownership, like some other associations, also offers Shared Ownership schemes specifically for people over 55, where a range of support services also accompany the property. The association will always be there to offer guidance and support, should you need it. 

Are Shared Ownership properties more complicated to sell?

Not any more complicated than an average property. The new shared owner buyer just needs to meet the same eligibility rules that you did when you first bought.

I'm interested - what do I do next?

Browse our properties to see how to arrange a viewing, or visit the local Help to Buy Agent website for the area you're looking in. Help to Buy Agents have details of all the Shared Ownership properties available in the regions, and for brand new properties, you'll start your application through them.

Riverside Home Ownership's friendly, expert team can talk you through all the options. Call 0345 112 8800 or email sales@riverside.org.uk
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Riverside Home Ownership

We're the specialist leasehold and affordable home ownership division of The Riverside Group Limited, one of the UK's largest housing associations. As well as building, selling and letting a wide range of property types, Riverside Home Ownership provides services to, and manages the leasehold of over 4,500 homes across the UK.