| Shared Ownership - A Beginners Guide | |||||||||||||
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For further
details please contact:
Ms M L Williams, North Wales Housing Association Ltd., Plas Blodwel, Broad Street, Llandudno Junction, Conwy, LL31 9HL Tel: 01492 572727 This document is available on request in English, Welsh, and English or Welsh braille, large print, MOON, audio tape/CD or CD-ROM. To download a free version of Adobe Acrobat, please click on the logo below. Adobe Acrobat is needed to view the files on this page.  |
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Shared ownership helps people who cannot afford to buy a home of their own. This part of the site provides information about shared ownership. It explains how the scheme works, what is involved and what to do if you would like to buy a home through shared ownership and it also describes other options which might help tenants become home owners. For further information regarding the Step One scheme, please click here |
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| Contents: | |||||||||||||
What is shared ownership? |
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| Shared ownership
is an alternative to renting and full ownership. It is particularly
suitable for people with a regular income who want to buy their
own home but cannot afford to do so. With shared ownership you
buy a share of your home and pay rent on the rest. Shared ownership
does not mean that you share your home with someone else.
The total monthly costs of the rent and mortgage are lower than the cost of a mortgage needed to buy 100% of the same home. This is because shared ownership is supported by government money which reduces the rent. |
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| What are the diferent types of Shared Ownership? | |||||||||||||
| Shared Ownership - The purchase of existing shared ownership properties, which the current shared owner is selling. | |||||||||||||
| Who can become a Shared Owner? | |||||||||||||
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| How does Shared Ownership work? | |||||||||||||
| The size of
share you buy starts at 40/50% of the value of the property. Shared
owners pay a monthly rent in advance to the Association on the
share which they have not bought. For the share you buy, you will normally need a mortgage though you can pay cash for your share if you have it (for example, if you have money from an inheritance). Mortgages are available from building societies and banks. You will need to visit one (or more) to find how much they will lend you. You may be able to get a 100% mortgage. If not, you will need to find a small deposit (usually 5% of the value of the share you are buying). |
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| How much does Shared Ownership cost? | |||||||||||||
| The exact amount paid out each month will depend on a number of things such as the price of the property, the size of the share you buy, the rent and mortgage costs. The larger the share size you buy, the higher the monthly costs of the combined mortgage and rent payments. | |||||||||||||
| This is an approximate guide to how much you might expect to pay per month under shared ownership. | |||||||||||||
House
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Share
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Price
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Mortgage
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Rent
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Total
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| £ | % | £ | £ | £ | £ | ||||||||
| 90,000 | 40 | 36,000 | 270 | 105 | 375 | ||||||||
| 100,000 | 40 | 40,000 | 300 | 110 | 410 | ||||||||
| 110,000 | 40 | 44,000 | 330 | 120 | 450 | ||||||||
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| What costs are involved in becoming a Shared Owner? | |||||||||||||
| As with buying a house
on your own, becoming a shared owner involves certain costs. Some
costs you will only have to pay once. Others you will have to pay
regularly, usually monthly. Costs when you buy • legal fees (for your solicitor or conveyancer) • valuation fees (for a survey of your home required by banks and building societies) • any mortgage arrangement charges (check with your lender the bank or building society) • any deposit made (which will reduce your monthly costs) Moving costs These might include • moving expenses • possibly some fittings or furniture Don’t forget once you’ve moved in there are everyday living costs • rent • mortgage payments • any mortgage protection policy (to insure against unemployment) • contents insurance (for your belongings, furniture, carpets etc.) • council tax • all gas, electricity, water and telephone charges • other normal household bills (e.g. TV licence) • all repairs, decoration and maintenance costs as a shared owner you are responsible for these. |
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| Can i buy a bigger share of my home? | |||||||||||||
| Usually, a year after you
buy your home you can increase your share. This is known as staircasing.
With staircasing you could become the outright owner of your home.
Each time you must buy at least 20% more of your share. The share
you purchase will cost a percentage of the market value of the
property at that time. Each time you increase your share, your rental payments will be reduced. But, if you pay for your additional share with an increased mortgage, your monthly mortgage repayments will go up. Usually, the purchase of extra shares means that the total of your rent and mortgage payments goes up. However, you do not have to increase your share it is entirely up to you. Shared ownership is flexible and allows you to choose if and when you want to increase your level of ownership. |
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| What happens when i want to move? | |||||||||||||
| It is no different
from moving when you own your home outright. The first step is
to advise the Association that you wish to dispose of our share.
Once a value is agreed the Association will market your share to
other shared owners on their current list. The Association will
charge a fee of £150 plus VAT for this service.
If the Association does not nominate a purchaser within a reasonable period, you may then sell your property on the open market probably through an estate agent. However, at this point an independent valuation will have to be carried out the cost of which is the responsibility of the shared owner. When you decide you want to move the Association
will explain how this operates in more detail. In practice,
shared owners find selling their home no more complicated than
it would be if they owned it outright. |
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| Who benefits from any increase in value when i sell? | |||||||||||||
| You, as the shared owner,
benefit from any increase in value of the property on the share
you own. If the value of your home had increased by £5,000
and you owned 40%, your share of the increase would be £2,000. But house prices can fall as well as rise. If this happens, you will have to bear a share of the loss. |
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| Other questions about Shared Ownership: | |||||||||||||
| 1)
Can i alter or improve my home? Yes, but you must get written consent from the Association before you make any alteration or addition to your home. You may also need to get permission from your mortgage lender. You will pay all the costs of any alteration or addition. However, if you sell your home, you only get your share of any increase in value. |
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| 2) Am I responsible
for repairs, decoration and maintenance? Yes, as the shared owner, you are responsible for repairs, decoration and maintenance of your home and for any costs. |
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| 3) Is the shared
owner responsible for building insurance? Usually not. This is covered by your rent. If you go on to become the outright owner, responsibility for building insurance passes to you. House contents insurance is always the shared owner’s responsibility. |
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| 4) Can I sub-let
my home? Sub-letting your home will not be allowed. |
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| What do i do next? | |||||||||||||
| If you are interested and want to find out more about shared ownership: | |||||||||||||
| Contact the Association
to establish : • whether you qualify • what properties are available in your area • when you could purchase a property |
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| Visit your bank
or building society to: • discuss your wish to purchase a shared ownership property • find out how much they will lend you • find out about different mortgages |
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| Speak to other
professionals • solicitor to find out the legal requirements of purchasing a home • licensed conveyancer instead of a solicitor • speak to banks or building societies about different types of mortgages available |
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| What areas do you cover? | |||||||||||||
| We mainly cover the
coastal areas of North Wales from Towyn to Caernarfon and parts
of Ynys Mon, with occasional units/estates inland. Please see areas
covered in application pack. |
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REMEMBER Your chance to own your own home could only be a phone call away! FOR FURTHER INFORMATION, PLEASE
CONTACT |
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