Shared Ownership in South Holland
Shared ownership provides an opportunity to purchase a share of your home, typically ranging from 10-75 percent of the total home value, and then pay rent on the remaining share. This reduces the required deposit amount at the initial stage of buying, and you can subsequently purchase more shares later, gradually moving towards full ownership through a process known as "staircasing."
How shared ownership works
With Shared Ownership, you can buy either a new build or existing property at a percentage of the open market value based on what mortgage your income allows. You then pay rent on the remaining share to a Registered Provider (housing association, local council, and other organizations). In some cases, you may have to pay a service charge.
Using an example of estimated monthly costs for purchasing a 50 percent share of a 3-bed (estimated in Feb 2024), you could expect to pay around £1095 a month, as detailed below:
| Open Market Price | £250,000 |
|---|---|
| Share Value | £125,000 |
| Minimum Deposit Required | £6,300 |
| Mortgage | £118,700 |
| Unsold Value | £125,000 |
| Monthly Rent | £286 (2.75%) |
| Service Charge | £80 |
| Estimated mortgage per month | £729 |
| Estimated monthly cost | £1,095 |
The monthly rental expense is determined by calculating 2.75% of the retained equity. The monthly mortgage expense is calculated based on a Variable Rate Mortgage at 5.50% over a 25-year repayment term.
The Registered Provider has the authority to review rent annually. For leases signed before October 12, 2023, the maximum allowable rent increase is the percentage rise in the Retail Prices Index (RPI) over the previous 12 months, plus 0.5%. If the RPI increase is 0% or negative, the maximum rent increase is 0.5%. For leases signed after October 12, 2023, rent can be increased by the Consumer Prices Index (CPI) plus 1%.
Shared ownership eligibility
You might be eligible for shared ownership if:
- your household income is £80,000 a year or less (£90,000 a year or less in London).
- you are a first time buyer or current/previous homeowner with a legitimate reason for requiring affordable housing.
- you must be at least 18 years old.
- you have a good credit rating.
- you have at least £1500 in savings.
- you have a minimum of 5 percent deposit.
- For some homes you may have to show that you live in, work in, or have a connection to the area where you want to buy the home.
Apply for shared ownership
In most cases, you may have to apply directly through the Housing Developer or local Estate Agent. There are several new shared ownership homes and re-sale opportunities across the district, check online or speak to local estate agents to register your interest.