Have you thought about buying your own home but can’t really afford it?
Have you heard about Shared Ownership? This might enable you to purchase a home you wouldn’t have been able to afford otherwise?
Shared Ownership is part buy and part rent. This scheme allows you to purchase a share of between 25 per cent and 75 per cent, and then pay rent on the remaining share to a housing association.
We have a friendly team at Cornerstone of Anne, Clare and Sally who will tell you all about it and where to the properties. Anne explains “While there are still rental payments due on your share of the property you don’t own, over time, you can build equity in the property until you own 100% of the home. This is called staircasing.”
- You must have an income of less than £80,000 per year (this applies to joint incomes as well)
- You must be a first-time buyer, or in the process of selling your home. (and this applies to anyone you’re buying the home with).
- You must have a good credit history and be able to demonstrate you’re able to afford the costs associated with a Shared Ownership home.
- You will need a deposit for your mortgage of around 5-10%
It’s really important to create a budget planner if you’re thinking about buying. This should include your mortgage payments, rental costs on the share of the home you don’t own, the service charge, as well as any other regular monthly outgoings.
Here we give answers to the most frequently asked questions by current shared owners on buying, selling and improving your home. If your query isn’t covered here or you need any further assistance please get in touch with us.
How do I buy more shares in my home?
As a Shared Owner you can buy additional shares in your home if you so wish. This is called ‘staircasing’.
You can staircase up to owning 100% of your home but any staircase must be a minimum of 10%. For certain rural properties, there may be a restriction in place where staircasing is restricted to a maximum of 80% ownership.
Is staircasing right for me?
We advise that you should speak to an independent financial advisor to check that you have the sufficient additional funds/income available to successfully staircase.
How do I staircase?
The first thing you will need to do is to let us know about your intention to staircase. You may wish to speak to a member of our development team in the first instance about the process.
You will need to supply us with a written confirmation (email or letter) of your intention to buy more shares in your home and any improvements you have paid for yourself. We will then send you a letter outlining the process from start to finish and letting you know what you will need to do.
How do I sell my Shared Ownership home?
Selling your Shared Ownership home is slightly different to selling an open market property. We’ve summarised the process in five steps, below!
Step 1 The first thing you will need to do is to let us know. We require written confirmation of your intention to sell. You may do this via the contact us form. Once we have your request we will send you a letter outlining the process.
Step 2 All Shared Ownership properties must be bought and sold at a fixed price set by a Royal Institute of Chartered Surveyors (RICS) valuer. Please note the valuation is only valid for three months and you may have to get this updated after this period. You will be required to arrange and pay for the valuations.
Step 3 Before your property can be marketed you must supply us with an Energy Performance Certificate (EPC). You will need to arrange and pay for the EPC and it may be possible it carried out at the same time as the valuation.
Step 4 Send us your Valuation Report, EPC. We will then send you a form to sign setting out the agreed sale price and requesting the contact details for your solicitor.
Step 5 We will advertise your home on the Help to Buy South West website and this website.
From the date of receiving the information in Step 4, we have an eight week period of exclusivity in which to find a suitable buyer. If we find one during this time we charge a fee of 1% plus VAT of the full market value.
If after this period a suitable applicant has not been found, then you are free to sell on the open market through an estate agent. However, the property can only be sold at the RICS approved valuation price and we need to check the buyer meets the shared ownership eligibility criteria.
What if I want to make improvements to my home?
As a Shared Owner, you are responsible for all repairs and redecoration to your home. You may make minor improvements such as adding kitchen units or replacing fittings like boilers or bathroom suites. However, if you wish to undertake major alterations or extensions to your home you will need to obtain our written consent before you carry out any work.
The types of improvements for which you need to get permission include:
- Removal of internal walls to change room sizes and layouts
- Adding extensions, conservatories or garages
Please note that you are advised to keep your own record of permission letters, expenses incurred and planning permission or Build Regulation certificates.
For more handy advice on completing simple DIY repairs, check out our ‘DIY repairs with Cornerstone’ videos here.