An Introduction to Shared Ownership
If you are struggling to get that first step on the property ladder, Shared Ownership could be the solution for you. Selena from our Sales Team is here to tell you everything you need to know about Shared Ownership.
What is Shared Ownership?
Shared Ownership is a part-buy, part-rent Government-backed affordable home ownership scheme that makes it easier for you to take the first step onto the property ladder.
You purchase a share in a property, usually between 25% – 75%, and pay an affordable rent on the share that you do not own.
Who is eligible for the Shared Ownership scheme?
Shared Ownership gives people who can’t afford to buy a home the chance to get on the property ladder.
To be eligible for a Shared Ownership property, you must:
- Have a household income of less than £80,000.
- Not be a current homeowner – if you currently have a home, it must be sold before you are eligible for a Shared Ownership property.
- Not be able to buy a similar property outright.
Where can I find Shared Ownership properties that are currently on the market?
You can find all our Shared Ownership properties on our website: www.torushomes.co.uk/developments/
I’ve found a property I love – how to I go about purchasing it?
Buying any property can be stressful, but our Sales Team is here to make the process as smooth as possible.
Step 1. Submit an Expression of Interest
Step 2. Complete a Help to Buy application on help to buy agent1
Step 3. Initial Affordability assessment, with supporting evidence
Step 4. Arrange a viewing
Step 5. Reserve your dream home (£350 fee)
How much is my deposit likely to be?
Because you will only need to put a deposit down on the share of the home that you own, you will probably find your deposit will be much less than if you were purchasing outright.
Let’s say you were to purchase a 50% share of a property worth £150,000 and wanted to put down a deposit of 10%. This would equate to £7,500. On the other hand, if you were purchasing a house of the same value outright, you would need £15,000 for the 10% deposit.
We can put you in contact with an independent advisor who will be able to discuss deposits, and your monthly mortgage repayments, based on your current situation.
How much will the rent be?
The rent you pay will be based on how much of the home you own. Own more home, pay less rent.
Generally, your rent over the year will be 2.75% of the share of the house you don’t own.
Lets got back to our previous example. If you owned a 50% share of a property worth £150,000, you will likely pay £170 a month. If you owned 75% of the same property, you’d likely pay £85 a month.
Are there any other charges?
You will pay a charge for the upkeep and management of the development. If you are purchasing an apartment in a block, the upkeep of the communal areas will be covered through this. The charge will also include buildings insurance which has to be provided by ourselves.
How much of my home will I own?
This initial share will be between 25% and 75%, depending on the development.
The share you can purchase will be decided by an Affordability Calculator. This looks at your current income, debt repayments and deposit. Your financial advisor will also be involved in assessing what share is affordable for you to purchase based on your financial circumstances and what a bank or building society is willing to lend.
Can I eventually own the property outright?
Absolutely. Through a process called ‘staircasing’, you will be able to increase shares in your home. The more of your home you own, the less you will pay on rent. Once you have purchased 100% of your home you will no longer have to pay rent at all.
Each time you staircase you will be buying a share at the current market rate, which means you could pay more or less for your future shares.
What am I responsible for?
On top of paying your mortgage repayments, rent and services charges, you will be responsible for repairs to the property. However, most new builds have a 12-month defect period from when they are handed over to Torus Homes.
Can I make alterations to my home?
As per the terms of your Shared Ownership lease, you are able to make non-structural alterations to the interior of the property with our permission. You are unable to make any structural alterations to the property – this includes conservatories, extensions, etc.
What else will I need permission for?
Usually within the terms of the lease, you will need to request permission to keep a pet in the property and also to install a satellite dish. Permission for both of these can usually be obtained through your solicitor when you are purchasing the property – unless there are any restrictions on a particular development.