Shared Ownership (cont'd...1)

How does shared ownership work?
The scheme allows you to purchase a share of a property usually from a housing association. The share you purchase is funded by a mortgage which you will need to arrange with a bank or building society. The remaining share you do not own is rented from the housing association.

The size of the share to be purchased will depend on your income and savings. Normally applicants buy a 50% share but you may purchase a smaller or larger share (to start with, you can buy as little as 25% or as much as 75%). The higher the share you purchase the less rent you will have to pay. You will also have to pay a service charge when you buy a flat. Later on, if you wish and can afford to do so, you can buy further shares until you own the property outright.

Remember that house prices can go up or down. This means that sometimes you might pay more for buying additional shares or have to sell at a price less than you originally paid.

When you purchase through shared ownership, the housing association will grant you a lease which sets out your rights and responsibilities.

What does the shared ownership lease entitle me to?
Whether you buy a house or flat under shared ownership terms, the housing association will grant you a lease usually for 99 years. It will entitle you to live in your home as an owner-occupier. It will also entitle you to buy further shares in the property and sets out how you can do this. It also states that you can sell your property.

Other points covered in the lease set out your responsibility for repair and payment of rent and service charge. Although you have not bought the property outright, you will have the normal rights and responsibilities of a full owner-occupier.

If you have any questions on how the scheme operates ask the housing association selling the property. You are also advised to take your own legal advice on the terms and conditions of the lease.