CAN I BUY OUT THE REMAINING SHARE OF THE PROPERTY?

Yes. This is called ‘staircasing’. You should check with your housing provider as to the specific terms of staircasing arrangements for the home you intend to buy. Normally, you will be able to staircase as and when you can afford to in a minimum of 10% tranches to the point that you own outright.

HOW LONG DOES IT TAKE TO GET A PROPERTY VIA SHARED OWNERSHIP?

The process of purchasing a new-build property depends on a number of factors, such as the length of time required to arrange mortgage financing and the speed at which the solicitors involved can process the sale. Usually it takes around two months from start to finish although it can take as little as 28 days if everything proceeds quickly. If building work has yet to be completed on the development, this may lengthen the process.

WHAT OTHER COSTS ARE INVOLVED WITH BUYING A SHARED OWNERSHIP PROPERTY?

In addition to the money you will need to put towards your deposit it is suggested you will need approximately £2,500 for the cost of solicitor fees and mortgage arrangement fees. This is just a guide as you may be able to find cheaper deals by shopping around.

HOW IS THE SERVICE CHARGE CALCULATED?

The lease should set out how your service charge will be calculated. Often it is a percentage or proportion of the total costs of repair, maintenance, management and insurance of the building. The amount you pay will normally vary but a few leases provide for a fixed service charge.

WHAT IS A SERVICE CHARGE?

Service charges are payments by the homeowner to Garden City Homes for the services they provide. These include maintenance and repairs to common parts, insurance of the building and, in some cases, provision of lifts, lighting, communal aerials, door entry systems, cleaning of common areas and grounds maintenance, etc. Usually the charges will also include the costs of management.

Service charges can vary from year to year. They can go up or down without any limit other than that they are reasonable. Details of what can and can’t be charged by the landlord and the proportion of the charge to be paid by the individual homeowner will all be set out in your lease.

DOES THE RENT ON A SHARED OWNERSHIP PROPERTY INCREASE?

The rent paid to Garden City Homes on the share not owned by you will be reviewed periodically, usually every year, and will be increased in line with any proportionate increased in the Retail Prices Index plus an additional amount, typically between 0.5% and 2%. Note that the rent is reviewed on an “upwards only” basis and will not go down when reviewed. You should always check the terms of your lease carefully before you purchase a shared ownership property for details of possible rent increases.

WHEN YOU PURCHASE A SHARED OWNERSHIP HOME TO WHOM DO YOU PAY RENT?

You pay rent to Garden City Homes management. The amount you pay depends on the size of the share of the property you have purchased and is generally at a lower rate than you would pay when renting privately.

HOW MUCH RENT WILL I HAVE TO PAY IF I PURCHASE A SHARED OWNERSHIP PROPERTY?

The exact figures for the rent are sent to you with the viewing details. It is usually set around 3% of the unsold equity.

For example: if you wanted to buy a 50% share in a property worth £200,000 the equity you would pay rent on is £100,000. If you divide the unsold equity by 100 and multiply by 3 you will get the total rent payable per annum. Just divide this by 12 to get the monthly rent payable.

The amount of rent will vary for each home depending on:

  • The share you buy
  • The value of your property when you buy it

DOES SHARED OWNERSHIP MEAN SHARING WITH ANOTHER PERSON?

No. Shared ownership does not mean you share the ownership of the property, or have to live with another person. It means you own a share of the property and pay rent on the share you don’t own to Garden City Homes. Buying a house with friends, a spouse or a partner is known as joint ownership.

CAN I PURCHASE A 100% SHARE STRAIGHT AWAY?

No. If you can afford to purchase 100% of the property then you do not need shared ownership and you should look in the outright sale market. Most leases will allow you to staircase to 100% eventually, but you should check this is an option in the terms of your lease before purchasing.

HOW MANY BEDROOMS AM I ENTITLED TO PURCHASE?

You are entitled to purchase a property which has one additional bedroom than you currently require. A single person is therefore entitled to purchase a two bedroom property, a couple are entitled to purchase a two bedroom property, and a couple with one child are entitled to purchase a three bedroom property and so on. Two friends buying together are entitled to purchase a three bedroom property

DO I HAVE TO USE THE RECOMMENDED FINANCIAL ADVISOR

You will need to have a financial assessment with one of the financial advisors working with the scheme. However, you can use your own financial advisor to arrange the mortgage. You may find it faster and more cost effective to use a financial advisor familiar with the schemes.

WHAT IS THE MINIMUM DEPOSIT I WILL NEED FOR A SHARED OWNERSHIP PROPERTY?

This depends on the full market value of the property and the size of the share you are purchasing, your mortgage lender and your credit rating. The benefit of shared ownership is that the deposit required will be significantly lower than if you were purchasing the property outright because you only need a deposit on the share you are purchasing. Generally, shared ownership deposits are between 5% and 10%.

HOW DO I FINANCE A SHARED OWNERSHIP PROPERTY PURCHASE?

To purchase a shared ownership property you will need to have access to a sum of money to use as the deposit (traditionally between 5% and 10% of the full market value of the property), and approximately £2500 to cover solicitors fees and other associated costs that come with purchasing a property. You will then need to take out a mortgage from a bank or building society to pay for the rest of your share.

WHAT SIZE SHARE CAN I PURCHASE IN A SHARED OWNERSHIP PROPERTY?

Generally speaking, the minimum share is available to purchase in a new build shared ownership property is 25%, and the maximum share is 75%. However, this may vary depending on the housing association. Your income and savings will be assessed by an independent financial advisor to determine what size share is affordable for you. So, the minimum share available may be set to 30% by the housing association but, if it is affordable, you could purchase a 40%/50% etc. share.

CAN I PURCHASE ANY PROPERTY ON A SHARED OWNERSHIP BASIS?

Shared ownership is only available on properties that have been built for that scheme. Therefore, the option does not exist to make an offer on an outright sale property on a shared ownership basis.