Housing: shared ownership explained

Owning a home that meets your needs might seem out of reach, but shared ownership can help you get on the property ladder for less.

Having a home that fits your needs and your taste is important in having a high quality of life, and the UK is taking steps towards making more homes inclusive, accessible and adaptable. During August 2022 the government committed to raising the minimum accessibility standard for new homes after more than 98 per cent of consultation respondents were in favour of this. These new rules won’t come into place immediately, but it is a step towards having better housing for disabled people and could make the idea of purchasing your own home more appealing. In 2022, there’s more support than ever before to help you get on the property ladder including Shared Ownership. 

On the property ladder

This September, Shared Ownership Week will showcase a scheme helping first-time buyers and families get on to the property ladder, but the Shared Ownership Scheme is available all year round for buyers to take advantage of. In April 2021, the UK Government launched a new model of the scheme, making it easier for people to buy their own home and improving the conditions that apply when using it. 

Shared Ownership might sound like you have to live with someone else to take advantage of the scheme, but this isn’t the case: it allows you to own a share of your home while a housing association owns the rest. This means that unless you can buy your share outright, you’ll take a mortgage out for the amount you own, and you will pay rent on the part that the housing association owns. 

In England, you can own anything from 10 per cent to 75 per cent of the home, whereas in Scotland this is between 25 per cent and 75 per cent. For example, if you bought 25 per cent of a house worth £100,000, you would own £25,000 of it (25 per cent) and the housing association would own £75,000 of it (75 per cent). Over time, you can buy more shares in your home with the chance to own 100 per cent, but equally, you don’t have to buy any more shares and can split the profit with the housing association if you decide to sell. 

Shared Ownership Week will give people interested in the scheme a chance to learn more through information and online events with partner organisations. 

Eligible

A common misconception about Shared Ownership is that it is only available to first time buyers, but this isn’t the case: anyone who meets a set criteria can apply. 

In order to be eligible, your household earnings must be less than £80,000 outside of London or less than £90,000 if you live in London; you have to be either a first-time buyer or have previously owned a home and can’t afford to buy a new one that suits your needs; and in most cases you have to already live within the area that you are applying in. If you currently own your home, you have to be in the process of selling it to apply. 

You’ll also need a deposit to secure a mortgage for your share of the home, this is normally 10 per cent of the value of your share. For families where someone in the household has a disability, you could apply to the scheme to buy a home that suits your loved one’s specific needs. 

The scheme applies to new build homes or homes that are listed through a housing association’s resale programme and it’s easy to get the ball rolling. If you think you are eligible, you should get in touch with your local registered provider and homebuy agent to start your application. You can find out how to contact agents in your local area at www.ownyourhome.gov.uk 

Once your application is in place, these agents will help you to search for available properties in your area that are eligible for the scheme. Once you find the right one you can reserve it. 

Options

Shared Ownership is a great option if you’re looking to take your first or next step on the property ladder, especially if homes that meet your needs are out of your current budget, but there’s other support available for specific communities. The Older People’s Shared Ownership (OPSO) scheme has the same principles, but is only available to people over the age of 55 and once you own 75 per cent of the home, you won’t have to pay any rent on the remaining share. 

Unlike Shared Ownership and OPSO, the Home Ownership for People with Long-Term Disabilities (HOLD) scheme gives you the chance to buy a home on the open market under similar conditions if there are no properties available through another scheme that meets your needs. 

If you live in Scotland, have a disability and need alternative housing, you could be eligible for up to 49 per cent towards the cost of your home through the Scottish Government’s LIFT Open Market Equity scheme. This helps first time buyers and priority groups get on to the property ladder. To use the scheme, you have to provide supporting evidence of your additional housing costs arising from a disability, but the additional funding will come from the government rather than a housing association. In most cases, you can increase your share to 100 per cent over time. Find out more from Link Housing.

To find out more about Shared Ownership, visit www.sharedownershipweek.co.uk or learn more about OPSO and HOLD at www.ownyourhome.gov.uk.

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