Shared Ownership
With the continuous rise in property prices, we at North Hertfordshire Homes are doing everything we can to help more people get a foot on the property ladder, and this is why we are introducing shared ownership homes as part of our development programme.
What is Shared Ownership?
Who Can Buy Through the Shared Ownership Scheme?
How Much Will It Cost Me?
Rent
Additional Cost
Repairs, Insurance and Service Charges
Arranging A Mortgage
Extra Shares
Making Improvements Or Alterations To Your Home
What If I Get Into Financial Difficulties?
What Should I Do Next?
Shared ownership is a low cost route to home ownership aimed at people who cannot afford to buy their own home outright. It is as straightforward as the name suggests – you buy a share of the property, and pay rent on the proportion of the share you don’t own.
Who Can Buy Through The Shared Ownership Scheme?
Most first time buyers can apply to purchase a property through shared ownership; however priority will be given to:
- Council and housing association tenants
- People on their local council’s housing register
- Key workers, for example police officers, nurses and teachers. Please ask your local council for a full list of key worker occupations in your area.
In order to qualify you must meet the following criteria:
- You must have been employed on a permanent contract basis for at least six months
- If you are self-employed you will need at least two years audited accounts
- If you have ever had a County Court Judgement against you it must be satisfied
- You must be a UK resident or have the ‘right to remain’ clearly established and shown on your passport
- You will need to meet the minimum income requirements. These vary from scheme to scheme. We will also take into account financial commitments you have, such as bank loans, to make sure you can afford the property.
- You must have sufficient savings to cover legal fees and moving costs.
We will not be able to assist you if you can afford to buy the property outright on the open market.
The price of the property is based on the normal open market value and the amount or share you buy will vary depending on the property and your circumstances.
For Example:
|
Property
|
Market Value
|
Equity share at 40% (the amount that you will need to obtain a mortgage for)
|
Monthly Rent
|
|
2 bedroom house
|
£183,000
|
£73,200
|
£228.75
|
You will need to arrange a mortgage with a bank or building society to pay for your share of the property. The amount you will need to borrow is based on your income before tax and other deductions. The cost of each scheme will vary, so the amount you need to borrow will depend on the share purchased and the price. Some mortgage lenders are more used to lending on shared ownership properties than others, so it’s worth talking to a few before you decide which one to go with.
The amount of rent you pay will depend on the share of the property you own, and can be paid monthly. The rent is subsidised, as housing associations receive a grant from the Government to enable them to charge rent at a lower level than a mortgage or private landlord can.
As with any other property purchase you will also have to pay:
- The bank or building society survey
- Legal fees
- Stamp duty
- Deposit
- Removal fees
Repairs, Insurance and Service Charges
If you part purchase a house you will be responsible for all repairs and redecoration both inside and out.
If you purchase a flat – A service charge will be payable which will include some of the following:
- Buildings insurance
- Repair and maintenance of structure and common parts
- Landlord’s lighting (lighting of communal areas)
- Cleaning of communal parts
- Gardening and general maintenance
After you have been in the property for a specified length of time (usually 12 months) you will be entitled to buy more shares by a process called stair-casing. This will also be dependant on whether your own financial situation has improved however. In most cases you can buy right up to the point where you own your own property outright. As you buy more shares of the property the rent you pay will go down. Each time you want to buy another share, the property is re-valued and you buy the additional share at the current market value.
Making Improvements Or Alterations To Your Home
If you wish to improve your home you will need our consent if the work involves non-structural alteration.
You are not allowed to make any structural alterations to the property. If you make significant improvements that affect the value of the home, then these will be taken into account when you sell the property so that you will benefit from the increase in value that your improvements have made. When you staircase, increase the percentage of your home which you own, any increase in value as a result of your improvements will be ignored. However, not all works that you carry out will be improvements for the purposes of the valuation.
What If I Get Into Financial Difficulties?
The mortgage contract is between you and your bank/building society. If you begin to have financial difficulties and you cannot pay your mortgage you should let them know as soon as possible. If you fall behind and cannot agree a solution there is a risk that they may take possession of your home and sell it.
If you fall behind with your rent it is very important that you let us know and get in touch to discuss the options available.
If you are interested in applying for a shared ownership home contact the Home Ownership Team:
Home Ownership Team
North Hertfordshire Homes Ltd
Manor House
21 High Street
Baldock
SG7 6AZ
Telephone: 01462 633277
Email: homeownership@nhh.org.uk
