When purchasing a property through the conventional shared ownership route there are certain criteria that a buyer must meet to be approved to purchase the property on a shared ownership basis.
This article looks at shared ownership purchases from a registered provider that follows Homes England’s requirements. Homes England, who are responsible for overseeing the government’s affordable housing schemes, of which include shared ownership, have specific requirements that must be met in order to qualify as a purchaser, or “tenant” as you will be referred to under the Lease.
*If the shared ownership property is being sold through an agent, on the open market, for the full market value of the property (subject to final staircasing) then different rules will apply.*
Salary
Your household income cannot be more than £80,000.00 outside of London. This extends to £90,000.00 inside of London.
Deposit
The Standard Conditions of Sale of which are incorporated into almost all residential property transactions provide that a 10% deposit is paid to the seller upon exchange of contracts. You will be unable to afford the full 10% sum or the usual mortgage payments for a home, that is suitable for yours and your family’s needs.
You must additionally meet the criteria of one of the following:
Property Ownership
You must be a first-time buyer, meaning you have never owned any other property anywhere in the world and this will be the first home you have owned. Alternatively, if you have already owned a home before, you are unable to purchase a new one without the aid of the shared ownership scheme. If you currently own another property, whether this is shared ownership, or owned outright, and you wish to move but cannot afford a home that meets all of your needs, meaning you require the shared ownership scheme to move, you must dispose of this (sell) prior to completing the shared ownership transaction.
Other Criteria
A new household is being formed. For example, a relationship may have broken down, you may be looking to purchase a property with a new partner, or you could be moving out of your parent’s home.
Within the guidance provided by the government, there are provisions which state that they will prioritise members of the armed forces. There can be instances where more than one party will make an offer on an available property. If you currently serve, or have previously served in the armed forces, you may be considered a priority depending on your position.
What if I don’t meet the Homes England criteria?
Not everyone will meet the eligibility criteria for the Homes England shared ownership scheme. However, this does not mean that there are not any other routes available to you. Schemes such as the Discounted Market Scheme, Older Persons Shared Ownership Scheme and Home Ownership for people with a Long-Term Disability (HOLD) Scheme exist. Whilst each of these alternate routes have their own eligibility criteria, just because you do not qualify for one scheme, does not mean you would not qualify for another.
The providers will list their requirements on their respective websites. It is extremely important that when you are purchasing a property through a scheme of this nature, that you instruct a specialist lawyer who understands the details of the scheme and the steps that need to be taken to secure you your new home.
If you would like a quote or advice about shared ownership or any other residential property matter please visit Get a Conveyancing Quote or contact our team on [email protected] or call 01206 835300. The residential property team are ready to offer advice and support for your purchase of a shared ownership, leasehold or freehold property.