WHAT IS SHARED OWNERSHIP?

Shared Ownership is a government-backed scheme that helps first time buyers onto the property ladder. You will get a mortgage to buy an initial share in the property and pay a subsidised rent to Newlon on the share you don’t own. A service charge is payable to cover the cost of communal maintenance.

As your income increases you can buy further shares of your home until you own 100% of the value. This process is known as staircasing. The greater the percentage that you own, the lower the percentage on which you pay rent. However, if you do not wish to buy more shares in the property, you do not have to.

You are free to sell your shared ownership home at any time you choose. When you decide to sell, we retain the right for a short period, to nominate a purchaser to buy your home. This is to ensure that others unable to buy on the open market have the opportunity to purchase a home of their own.

ELIGIBILITY

What is the criteria to apply for a Shared Ownership home?

  • Your gross household income must not exceed £90,000 per annum
  • You will be expected to be a first-time buyer, although some applicants who previously owned a home may be eligible (e.g. relationship break up, relocation due to work)
  • You must not own a home anywhere in the world (unless a court order forces you to remain on the deeds of a property where your children reside)
  • You must be unable to afford a suitable home for your family size on the open market
  • You must be financially able to buy the minimum share available and pass a financial assessment 
  • You should be a British or EU/EEA citizen or have indefinite leave to remain. Applicants without indefinite leave to remain must prove they are able to secure a mortgage with an acceptable lender 

We give preference to applicants in the following order:

  • Armed Forces personnel (serving military personnel or former members of the British Armed Forces discharged in the last two years)
  • Current Local Authority or Housing Association tenants within the borough 
  • Keyworkers within the borough
  • People living or working within the borough
  • First time buyers in neighbouring boroughs 

We will prioritise according to family size for larger properties.

We are not able to prioritise single applicants for two bedroom homes, this is however dependent on demand. 

PROS AND CONS OF SHARED OWNERSHIP

Pros of Shared Ownership

Pros

  • More affordable way to buy a home for people who would like to purchase a property but cannot afford to on the open market – initial deposit and costs are lower, etc.
  • Often more affordable than renting
  • Benefit from property value appreciation – share equity will grow if price of your property rises
  • Opportunity to buy more shares and increase ownership
  • If your circumstances change, you can sell your share or move to another S/O property 
Cons of Shared Ownership

Cons

  • Part ownership means there’s a subsidised rent payment
  • Service charges – these aren’t capped and could potentially lead to higher costs
  • Repair/maintenance costs
  • Renting/sub-letting restrictions
  • Risk of negative equity
  • Costs to sell and staircase 

 

You should consider your financial situation and long-term goals before proceeding with Shared Ownership.

Contact us if you want to know more about Shared Ownership and whether it is suitable for you.