#TuesdayTips - Eligibility for Shared Ownership
Posted 20 September 2016 by Ben Salisbury
Shared Ownership Week is in full swing and the scheme provides a chance for individuals and households stuck in a rental rut to get their first foot on the property ladder and to begin investing in their own home.
With house prices putting property ownership out of reach for many and the number of new homes being built still well below the government’s revised target of 250,000 new homes, it remains very tough for first-time buyers to get their first home.
Shared Ownership provides an opportunity to at least make a start on owning your own home. On a ‘part-buy/part-rent’ basis potential homeowners can buy a share of a property through a housing association, from a minimum of 25%, up to 75%, where they pay a mortgage on the share they own and pay rent on the remainder.
Are you eligible for a Shared Ownership property?
This week’s #TuesdayTips looks at the eligibility criteria for shared ownership to see if you qualify and could apply.
Income – Shared ownership properties are available to households with an income of up to £90,000 a year in London and £80,000 outside of London.
Employment – As with other types of mortgages, to apply for a mortgage through Shared Ownership, you need to have a permanent contract of employment.
Property – To apply for a ‘part-buy/part-rent’ Shared Ownership property you must not already own a home or be in the process of selling one and if you are unable to purchase a suitable home to meet your housing needs on the open market.
Mortgage eligibility – You need to be able to raise a mortgage to part purchase a property unless in exceptional circumstances
Property size - You will normally be eligible to purchase a property with one more bedroom than you currently require, for example, a couple with one child would be eligible for a three-bedroom property.
Savings/Funding – There are additional costs for securing a shared ownership property. You need to have sufficient funds available for legal fees.
Credit status – It is worth checking your credit score through Experian, Equifax or Clearscore to make sure it is up to date and there is no incorrect information on it that affects your credit rating because you will need to pass a credit check. This is free to do or you can get a free 30-day trial depending on which company you use.
Occupation – Usually people who live locally or work in key areas such as the police, NHS or teaching will be given priority. However eligibility varies from development to development depending on what is set by local planning authorities.
Citizenship - If you do not hold a British or EU passport or your passport isn't stamped with either 'indefinite leave to remain', 'indefinite right to enter' or 'right of abode' you may not be able to get a mortgage
Local authority rules - Local authority planning permissions may require that preference is given to applicants that live or work in the area. Where the number of applicants exceeds the properties available, the housing association will generally give preference according to housing need.
Your guide to Shared Ownership from WhatHouse? is free to download.