Are you looking at home ownership options and considering shared ownership as an option to get on the property ladder?
If you are looking to buy a home through shared ownership, you will need to check if you're eligible for a shared ownership property.
All eligibility to buy a home using Shared Ownership is governed by Homes England. You can check your eligibility on the GOV.UK website by answering a few simple questions. The housing association selling the shared ownership homes do not determine the eligibility.
Please speak to one of our Sales Consultants about the specific shared ownership properties you are interested in. They will be happy to discuss your circumstances and questions you have about the scheme.
Am I eligible for shared ownership?
- You need to prove that you're over 18 and a resident in the UK.
- There is a maximum annual household income limit. To be eligible, your household income must be less than £80,000 (that's both yours' and your partners' or friends' income if buying together).
- The household income limit is £90,000 if you are buying in London.
- There is no minimum income, but the housing association will check if you can afford a property through an affordability check. You must be able to afford the regular payments for your mortgage, rent and service charge (if applicable).
- You cannot afford to buy a home on the open market.
- You have savings to cover the costs of buying a property such as solicitors' fees, charges and deposits.
- For some homes, you may have to show that you already live and work in the area, or have a connection to the area where you want to buy the home.
Do I need a good credit history?
You will need to show that you have a good credit rating to lenders when you are getting ready to reserve your home. If you are in rent or mortgage arrears, then this will affect your credit rating. You can check your credit rating for free using Credit Karma or Clearscore. A bad credit rating and county court judgements could affect your eligibility to get a mortgage. Lenders will look at individual cases and circumstances,
Do I need a mortgage?
Yes, you will need to obtain a mortgage for the share you take out on the shared ownership. This amount will depend on the percentage you have taken out and the value of the property. You will pay rent on the rest of the share to the housing association. The mortgage broker will ask for documents to show your incomings and outgoings, this include bank statements, pay slips and more.
What if I own a home already?
If you own a current home already, you must be in the process of selling it and you'll need to sell it by the date that you are buying a shared ownership home. You should have accepted an offer for the sale or have written confirmation for the agreed sale.
Am I eligible if I am over 55?
If you are aged 55 and above, then you could use the Older Persons Shared Ownership scheme. This allows you to buy a 75% share. This type of scheme is only available through certain housing associations and selected properties.
Isa priority for shared ownership given for any other circumstances?
The shared ownership scheme does prioritise for people that are or have been in the armed forces and military personnel for certain roles.
Historically, shared ownership homes were primarily tailored for first-time buyers, key workers such as nurses and teachers, military personnel, existing social tenants, and people with local ties. However, changes implemented by the government in 2016 aimed to make shared ownership more accessible. Prescribed priority groups were replaced with a broader eligibility criteria that allowed housing providers more discretion to sell to a wider range of buyers.
What if I am self-employed?
To get a mortgage for shared ownership, you will need to show at least three years of your accounts for self employment to show that you have enough income.
What else can help me become eligible for shared ownership?
Registering to vote will ensure you are on the electoral register. It is used by lenders to verify identity and to prevent fraud. You can easily register to vote online.
If you are renting a property, then you can use a service like Credit Ladder. This will register your monthly rent payments to credit score agencies. This could enhance your credit score for when you are ready to apply for shared ownership.
Make sure you have documents such as bank statements, pay slips, P60, ID, tax returns and proof of address when you are ready to apply for a mortgage.
Avoid using pay day loans as these could cause problems with repaying them because of high interest rates.