In the midst of rising housing costs, many first-time homebuyers are feeling the pinch
With high deposit requirements and mortgage payments, it can be challenging to get onto the property ladder.
However, the Shared Ownership Scheme offers a pathway to homeownership that is more accessible to those on a
lower income.
This popular scheme is designed to help people who cannot afford to buy a home outright, by allowing them to purchase a share of the property and pay rent on the remaining share. In this article, we will explore how the scheme works, the types of homes available, eligibility criteria, and the process of staircasing.
What is Shared Ownership?
Shared ownership is a government-backed scheme that enables you to buy a share in a home, typically between 25% and 75%, and pay rent on the remaining portion. You then have the option to increase your share over time, a process known as staircasing, until you own the property outright. The scheme is available on new-build properties or existing homes that are available through a resale scheme. Shared ownership homes are offered by housing associations, local councils, and other organisations, which act as landlords or providers.
Eligibility for Shared Ownership
To qualify for shared ownership, your household income must not exceed £80,000 a year, or
£90,000 a year if you're buying in London. One of the following must also be true:
- You are a first-time buyer.
- You have previously owned a home but cannot afford to buy one now.
- You’re forming a new household - for example, after a relationship breakdown.
- You are an existing shared owner who wishes to move.
- You own a home but cannot afford a new one that meets your needs.
- For some homes, you may have to show that you live, work, or have a connection to the area where you want to buy the home.
For further details on the eligibility criteria for the First Homes Scheme, please refer to their official website at https://www.gov.uk/first-homes-scheme.
The Process of Staircasing
Staircasing is the process of increasing your share in the property over time. The process is usually straightforward and is carried out through a housing association or other providers. When you buy a share in the property, you will have to pay rent on the remaining share that you do not own. However, you can buy additional shares in the property when you are ready to do so. This will increase your equity in the property and reduce the amount of rent you have to pay. Eventually, when you have acquired 100% ownership, you will no longer have to pay rent.
Final Thoughts
Shared ownership is a fantastic scheme that provides an affordable pathway to homeownership. It enables people to get a foot on the property ladder who would otherwise be unable to afford to do so.
If you're interested in finding out more about the Shared Ownership Scheme or would like to explore your options, please don't hesitate to get in touch with us today.
