You may have some knowledge of shared ownership, or perhaps this is the first time you’ve heard of the scheme. Either way, there are a lot of mixed views on what it actually is. During my time within estate agency, I have heard some interesting thoughts and assumptions of what it is, and so I thought it might be helpful to dispel some of those myths…
Someone once very confidently stated that shared ownership is terrible because, and I quote, ‘you don’t get to live in it half the time’. Other people have thought it is where you purchase with a friend. And the list continues. To put it simply, the shared ownership scheme is available for people who might not usually be able to afford to get onto the property ladder. The concept is that the buyer shares the ownership of their home with a housing association. So they might buy a 50% share in a flat. In this case, they would rent the other 50% from the housing association, paying 50% of the normal level of rent and financing the rest of the purchase with a mortgage, which would be 50% of the mortgage too. It is really helpful as a first step between renting and purchasing the usual way, because it’s more achievable for many people.
Shared ownership schemes do not usually restrict you to only ever owning a certain percentage either. The term for this is ‘staircasing’. This is basically where, after a certain amount of time, the buyer can purchase a higher percentage of the property. In many cases, you can go on to buy the full 100%. This would then be like owning a normal home. Obviously, the rent share would then reduce with each increment in proportion to how much extra you purchase.
Now there are usually restrictions on who is allowed to buy through the scheme. These can vary based on the housing association or the area you live in. You should refer to your local council, or the housing association’s guidelines to be sure. Exeter City Council have more information on their website which you can find here:
The reason for this is to ensure people don’t abuse the system, so that homes remain available for those that need them. A connection to the area is sometimes required, either if you have lived or worked locally for a number of years. They also don’t tend to allow people to buy them as second homes, or holiday homes. If you have owned in the past and are not a ‘first time buyer’, then this doesn’t necessarily mean you will be refused. Check with the housing association to be sure of their restrictions.
Hopefully this has given you more of an insight into what the scheme is, and has answered some of your questions. If you are just starting out and hoping to get onto the housing ladder, then this can be a great way to do that. An example of a shared ownership flat is this one for sale in Topsham. It is currently available at a 50% share and we have been informed that there is the potential to staircase to 100%: Armada Court, Topsham
Do get in touch with us if you would like to chat further, you can contact us here.
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