Shared Ownership – explained
from clean credit to poor credit - IVA, exbankrupts Right to Buy, etc

Shared Ownership

What is meant by shared ownership or part buy/part rent and how do you find out more about it?

Shared ownership schemes are intended for people who cannot afford to buy a property outright and gives them a helping hand to get on to the property ladder.

Although you will not own the property outright, you will still have all the normal rights and responsibilities of an owner-occupier. It is possible for up to four individuals to become joint owners, but each applicant must meet the eligibility criteria.

Shared ownership is the most common way of purchasing affordable housing from a Housing Association or Registered Social Landlord (RSL).

It allows you to purchase a share in a property, which can be anywhere between 25% and 75% with 50% being the usual average.

As when buying a property in the conventional way, you organise a mortgage to cover the cost of the percentage you are buying and then you pay a low rent on the outstanding part.

The Home & Communities Agency is sponsored and funded by the Department of Communities and Local Government .  its role is to regulate and fund Housing Associations in England. Housing Associations are the principle providers of new social housing.

There are currently a large number of Registered Social Landlords ( RSLs) in England. RSLs are social landlords who are registered with the Home & Communities Agency. The majority of RSLs are Housing Associations, but some are co-operatives, companies and trusts. Housing Associations are run as businesses, but they do not trade for profit and any money they make is ploughed back into the organisation to fund new homes and maintain existing ones.

A full list of Housing Associations is registered with the Housing Corporation and can be found in the Public Register of Social Landlords. The Housing Corporation office covering your area will also have a list of Housing Associations offering different schemes. Both can be found on www.housingcorp.gov.uk

Once you have purchased your share in a property, your investment doesn’t have to stay at the same level. As your finances allow, you can buy further shares in your home, buying it outright if you want to. This method of house purchase is known as “staircasing”.

Another scheme that is sometimes available is “Do It Yourself Shared Ownership. In this instance, rather than purchasing a property directly from the Housing Association, they would set you a budget and you would be able to look on the open market. When you have found a property, the Housing Association would purchase it and then sell you a share of between 25% and 75%. The scheme then works in the same way as outlined above

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