Shared Ownership and Shared Equity are the two main types of low-cost home ownership schemes run by the Government to help people who cannot afford to buy on the open market to purchase their own homes.
What is Shared Ownership?
Shared Ownership schemes have been devised by the Government to assist key workers and individuals who are considered in need of assistance with housing. You would need to contact your local Housing Association to identify whether you qualify for Shared Ownership in your area.
The term Shared Ownership means owning part of your property in conjunction with a co-owner; which is typically a Housing Association. You take out a mortgage for the part that you own (you are able to buy a 25%, 50% or 75% share in your home) and pay rent to the Housing Association for the remaining share of the property that you do not own. The bigger the share that you purchase, the less rent you have to pay. When you can afford to do so, you can buy more shares (known as staircasing) until you own your home outright. Many Housing Associations require that you to have a Shared Ownership mortgage agreed in principle so that they can offer you a property.
Shared Ownership Mortgages
There are only a limited number of lenders in the mortgage market who will lend for this type of arrangement – some lending the full 100% of the share. We have access to all the mortgage lenders in the Shared Ownership market, including those with adverse credit, and will be happy to help with these purchases. Shared Ownership mortgage lenders will need to gauge that you are able to afford both the mortgage payment and the rental payment (for the rented share of the property) when calculating your affordability.