You may purchase an initial share of between 25% and 75% by cash or mortgage. You have the option to buy more shares three months after the initial purchase and in most circumstances you can eventually own the property outright. If you staircase to 100%, there is no rent to pay although you may continue to pay a service charge.
You are 18 or over
Your household income is below £80,000
You do not currently own a home or have your name on another mortgage
You are able to obtain a mortgage or have cash available
You have not been in mortgage or rent arrears or in breach of your current tenancy agreement
You have a good credit history
You have at least £2,500 to cover the costs associated with purchasing a home
Priority is given to serving members of the armed forces, current local authority
Once you have been approved there is a £300 non-refundable fee to pay to reserve your home. If you pay the reservation fee but then change your mind before completion you will not get the £300 back. On completion of the purchase of your initial share this fee will be deducted from the sale price.
You will have to pay for your own legal costs associated with the purchase of your initial share. Costs vary and you need to ask your solicitor for a fee quote prior to instructing them.
Conveyance (solicitor) costs
Searches (for example a coal mining search will tell you if there has been any mining under or very close to your home. A local authority search will tell you if there are any local matters that affect you home such as a new road or a ban on advertising boards or similar)
Land Registry fee for recording the change of legal ownership of your home (from us to you)
A bankruptcy search so the mortgage lender will know if you have ever been bankrupt
There may be other costs to pay if you want more information about your home. For example you can have an environmental search done which will tell you if there is a risk of flooding or of any known pollution in the area.
Depending on the value of the property you may have to pay SDLT. This is a tax paid to the government when you buy a home. Your solicitor will be able to tell you if SDLT applies on your purchase and how much it will be.
On completion these costs are payable monthly to the housing association and more information can be provided before you make your decision to purchase.
Rent is payable monthly and is set at around 3% of the share owned by the housing association. For example:
If you wanted to buy a 50% share in a property worth £100,000 the monthly rent you would pay on the share owned by the housing association is;
£50,000 x 3% / 12 = £125 per calendar month.
A monthly service charge may be applicable to your property, dependent on the amount of common areas on the scheme. This charge typically covers the cost of landscaping, communal cleaning and the upkeep of communal paths and car parks. These may not be located directly next to your property but the charge is divided by all properties within the scheme.
Management fees are paid monthly on every shared ownership purchase but the amount will vary depending on where you live. These fees are for the administration of your account such as staff dealing with service charges, sending out annual statements and dealing with any estate management issues you may have.
This fee allows the housing association to instruct an annual independent financial audit of the accounts to ensure they are correct. This cost is divided by all shared owners that pay a service charge across all of our schemes.
Buildings insurance is charged monthly. If you purchase a house, once you own 100% you will be responsible for taking out your own buildings insurance and will not need to pay your housing association. If you own an apartment then, even when you own 100%, you will always pay buildings insurance to the freeholder.