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What is shared ownership?

Shared Ownership, also known as Low Cost Home Ownership (LCHO), is an affordable way to step on the property ladder. Typically the offer share will be between 10-75% (depending on which model you are purchasing under) of the property depending on how much you can afford. The bigger the share you buy, the less rent you have to pay. You will need to be able to raise a mortgage for the share you want to purchase unless you have sufficient money to enable you to purchase without a mortgage. Any deposit you pay will be smaller than if buying outright as you will be purchasing a share of your home.

We as the Housing Association who will own the remainder of the property will charge a rent which is reviewed annually. In addition to the rent, a service charge will be applicable to each property to cover things such as building insurance and estate management charges.

All shared ownership properties are leasehold by default, which means you have an agreement with the landlord to own the property for a certain number of years. When the lease comes to an end, ownership of the property returns to the landlord.

Eligibility

In order to qualify for a shared ownership property, you must have a household income of under £80,000 per year and one of the following must apply:

  • you are a first time buyer, or
  • you used to own a home but cannot afford to buy now, or
  • you are currently a shared owner

The following is also required for shared ownership:

  • You must be able to access a mortgage and or savings for the share
  • The property must be the occupiers sole dwelling, and at the time of completing a purchase of a shared ownership home the buyers must not own any other property or part of a property.
  • Where a specific development schemes required you must have local connection
  • Applicants must complete an application form and financial assessment, undertaken by an Independent Financial Advisor

You should be a British or EU/EEA citizen, or have indefinite leave to remain.

Applying for a new shared ownership home

If you are looking to buy a new shared ownership home from us, please contact the Estate Agent advertising the home. If there are no homes available you are welcome to contact Arches on info@archeshousing.org.uk to register your interest in shared ownership so we can contact you if a property becomes available meeting your criteria.

Arches operates a First Come First Served policy (please see the policy document at the bottom of this webpage) for fuller details. Please work with the Estate Agent for the home you are interested in, filling in the necessary forms and providing the necessary documentation. You will need to speak with an Independent Financial Advisor (IFA) to confirm your eligibility.

We suggest using a financial advisor such as Metro Finance, who will confirm your affordability and also be able to help you secure a mortgage in principle. You can contact Metro Finance on 0114 2999 380 for your assessment, or you can input your details online at www.metrofinancelive.co.uk.

We will then, if you are approved and reserve a property, progress to legals and ultimately exchange and completion. Ready to hand you the keys to your new home.

Want to buy more shares in your home?

After you've lived in your property for a certain amount of time, you can buy further shares in your property (the terms of this will be set out in your lease). For example, if you start out with a 25% share of your property, you can buy another 25%, which would mean you own 50%. This is called staircasing.

You may be able to staircase up to 100% of your property, in which case you would own the property outright and no longer need to pay rent to Arches. Your lease will set out rules about stair casing. Similarly, if you buy full shares in your property, you may become freehold, but this varies from property to property. Please check your lease for more information on your staircasing and freehold options for your home.

For homes under the new model you have the option to buy a 1% share each year for the first 15 years. The price of the 1% share is based on the original full market value adjusted up or down each year in line with the House Price Index (HPI). The HPI is a national statistic that shows changes in the value of residential properties. Arches will give you an up-to-date HPI valuation at least once a year and again when you request to buy a 1% share. If either party would prefer an RICS valuation instead of HPI one can be ordered, the party who chooses to instruct a RICS surveyor pays for the cost of the valuation. You cannot roll over unused options to buy 1% shares to future years. The offer is limited to a maximum of 1% each year.

What if I want to sell?

If you wish to sell your shared ownership property, you will need to approach us in writing to advise us that you want to sell.

You can read more about resales here.

What am I responsible for?

As a shared owner, your responsibilities will be laid out in your lease. For example the lease will reference:

  • paying your rent
  • paying your service charge (this covers things like grounds maintenance and communal cleaning)
  • having your gas appliances regularly serviced
  • carrying out any repairs and maintenance the property needs, both inside and outside (please check lease as under new model some repairs may be covered)

New Shared Ownership Model

A new programme has been introduced for new homes delivered under the new funding programme. Please look at the property information to confirm which model is being used:

Shared Ownership Model

Standard Shared Ownership Model

New Shared Ownership Model

Minimum initial share

25%

10%

Lease length

Lease for a minimum 99 years from new, but typically at least 125 years

Lease will be for a minimum of 990 years from new

Initial repair period

No

Yes

Buying more shares – Minimum purchase

10%

5%

1% share purchase

No

Yes

Landlord’s nomination period

8 weeks

4 weeks

 

Additional Documents

If you have any questions about shared ownership, please give us a call on 0114 228 8100 or drop us an email info@archeshousing.org.uk


Also in this section

Selling your shared ownership property