Shared ownership

What is shared ownership?

Low Cost Homeowership (LCHO), also known as Shared Ownership, is an affordable way to step on the property ladder. Typically, you can purchase any share from 25% to 75% of the property funded through a mortgage and/or savings. The Housing Association who owns 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.

Each year you will have the opportunity to purchase additional shares in your property, this is called "stair casing", until the point when you own your home outright. When additional shares are purchased the rent payable on the outstanding shares, owned by the Housing Association, reduces.

Target purchasers of shared ownership include:

• First time buyers
• Previous home owners who can't now afford to buy without help
• Housing Association or council tenants
• Serving MOD personnel or those discharged within the past 2 years
  
  

Who qualifies for shared ownership?

The following is the qualification criteria for shared ownership:

• You must have permanent employment
• Your combined household income must be less than £80,000 per annum
• You must be able to access a mortgage and or savings for the share
• The property must be the occupiers sole dwelling
• You must have local connections (may vary scheme to scheme)
• There will be an affordable assessment done on receipt of a completed application form
• The purchase should not leave the purchaser with savings in excess of £5,000 (dependant on circumstances).
• Your income should be sufficient to cover the rent and service charge on the property
• You must be unable to buy a similar type of home, suitable for your family size, on the open market
• You should be a British or EU/EEA citizen, or have indefinite leave to remain
  
  

What is shared ownership?

Shared ownership is an affordable home ownership scheme where you buy a share of a property (between 25% and 75%) and a housing association, like Arches, owns the rest, which you pay rent on.

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
  
  

How shared ownership works

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.

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.

If you buy full shares in your property, you may become freehold, but this varies from property to property.

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 the full resales process here.

What am I responsible for?

As a shared owner, your responsibilities will be laid out in your lease.

You will usually be responsible for:

• 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 note: each of our shared ownership properties have a number of checks carried out before it is handed over to our customers. While every effort has been made to make sure the property is free of problems, issues can occur with any new build property. If the defect is with the structure of the house, and is not cosmetic in nature, we would recommend approaching NHBC first. This provides a mechanism for the house builder to be compelled by NHBC to rectify issues. If NHBC judge these issues are the responsibility of the house builder, we will help you make sure a contractor corrects them.

If you have any questions about shared ownership, please give us a call on 0114 228 8100.