What is Shared Ownership? A guide.
What is Shared Ownership?
Shared ownership is a part buy, part rent scheme which can be a stepping stone towards full home ownership.
Initial share levels are available from 50% to 75% subject to affordability. The purchaser will need to raise a mortgage for their share in the property, and will pay an affordable rent on the remaining share. It is possible to purchase additional shares at a later date, up to and including 100% ownership. This process is known as staircasing.
Who is eligible?
Shared ownership is aimed at assisting people who require housing but are unable to afford to purchase a property outright on the open market. Applicants must have a household income of less than £80,000, and be otherwise unable to buy a property suitable to their needs on the open market. All shared ownership applicants are subject to eligibility and affordability assessments. The assessment will establish the share level that can be purchased and that demonstrate that you can sustain home ownership in the long term. Applicants are expected to be first time buyers though in some exceptional circumstances it may be possible to consider applicants from people who have previously owned a home.
What happens if you are interested?
All interested persons must complete an initial application form which can be downloaded from here.
Help to Buy North East and Yorkshire will email you to confirm the approval of your application. Incommunities will receive your approved application directly from Help to Buy North East and Yorkshire and contact you by email to advise that your application will be sent to Metro Finance. Metro Finance will carry out the required affordability assessment on behalf of Incommunities and establish affordability levels. Metro finance will then contact Incommunities who will arrange for you to view the available properties. Properties are allocated on a first come first served basis. A £500.00 non refundable reservation fee is required to secure a particular property (this will be deducted from the final amount upon completion)
**Incommunities are not a member of the same group as Metro Finance and Incommunities does not receive any payment or reward from Metro Finance. Metro finance can also help guide you through the shared ownership process.
Who arranges the mortgage?
Metro Finance can assist in helping you source a suitable shared ownership mortgage should you wish; they will assess your income and look at a number of mortgage lenders that specifically deal with shared ownership. You are not obligated to access a mortgage via Metro Finance.
Frequently asked Questions and Answers.
Does my rent pay towards more shares in the property?
Will my rent on the unpurchased share increase?
A rent review is carried out each year in accordance with the increase / decrease of the CPI (Consumer Pricing Index). The adjustments to your rent will become effective from the 1st April each year.
Are repairs still carried out by Incommunities?
No, the terms of your shared ownership agreement states that owners have full responsibility for repairs and maintenance of their property. All new build properties have a 10 year build warranty.
Are the properties insured?
The building is covered under incommunities buildings insurance for which there is an annual fee, you will need to obtain your own contents insurance.
What happens if my circumstances change and I need to sell my share. Is this possible?
Yes, you can sell your share in accordance with the terms of the shared ownership agreement.