A national campaign to help potential buyers understand how shared ownership works, which is backed by new Housing and Planning Minister, Gavin Barwell MP, has launched today.
Shared ownership enables people to buy a share in a new home – usually a minimum of 25% of its market value – with as little as a 5% deposit. Buyers pay a subsidised rent on the remaining share of the property and can buy further shares at any time – called ‘staircasing’ – until they could eventually own the entire property outright.
Shared ownership used to only be available to key workers, such as NHS staff and teachers, but the scheme has been expanded to include any worker. Income caps have also been raised, so families earning up to £90,000 in London and £80,000 in the rest of the UK could be eligible. Second steppers also now have the same priority as first-time buyers, and the cap on the number of bedrooms has been lifted.
But it’s worth remembering that shared ownership does have its downsides, so if you can afford to do so it is better to buy outright. You will be more restricted in what you can do in a shared ownership property – for example, it can be harder to sell your share because the house provider has first refusal on buying back the property. Also, you may not be allowed to sublet the property.
- See Mortgage schemes for first-time buyers for other help available.
‘Shared Ownership Week is a great opportunity to find a home’
Commenting on Shared Ownership Week, Mr Barwell says: “This government believes that hard-working people who aspire to own their own home should have the opportunity to realise their dream.
“We've already helped hundreds of thousands of people become homeowners through government-backed schemes and now by extending shared ownership even more people will benefit in the future. Shared Ownership Week is a great opportunity to find the homes in your area.”
The campaign, which runs until 21 September 2016, offers major housing associations – including Circle, East Thames, Guinness, Hyde, L&Q, Metropolitan, Moat, Network, Newlon, Notting Hill, and Southern – a chance to showcase their new-build developments and explain how the scheme works.
The week is also supported by Legacy, a property group set up by former Manchester United and England football player Rio Ferdinand, Mark Noble, captain of West Ham United, and ex-England International footballer Bobby Zamora, to deliver schemes for local councils that will provide on-site community and sporting facilities.
Mr Zamora says: “The quality of shared ownership properties has changed considerably over the years. Nowadays you will find the specification and location of these homes will rival those for private sale.
“Contrary to popular belief, shared ownership isn’t just for NHS staff, Armed Forces, teachers and other key workers, it’s for those who fit the criteria so it could be anyone from an accountant to a hairdresser.”
“I’ve invested 40% in my future”
Thirty-one year-old Johan Harmse (pictured above), has bought a home in Notting Hill Housing’s new development at Rathbone Market in Canning Town, east London. Inspired by a friend who bought through shared ownership last year, he realised he already had saved enough to buy a share in a scheme.
He says: “I’m paying more than I was renting, but I know that this is mine and that 40% of that money is being invested in my future. I plan to ‘staircase’ eventually too, as I would love to own my apartment outright.”