'Shared Ownership' is a cross between renting and owning a house. It allows the occupier to purchase a share in the ownership of the property and pay an occupancy charge on the remainder to a housing association. The occupancy charge is paid to the housing association and the mortgage payment to the building society, bank or other lender.
Five housing associations (HAs) in Highland have shared ownership housing. Whilst new shared ownership properties are no longer being developed (as they have been replaced by shared equity developments - see Section 3.1 and 3.2 above - existing shared ownership houses can be bought when their owners put them on the market. These sales are advertised in the local press – jointly marketed by the owner and the housing association. Generally, few shared ownership houses come up for sale.
Shared ownership housing is aimed mainly at people who can’t afford to buy a house outright on the housing market, but are still keen and financially able to make a start on the home ownership ladder and invest some of their money in their property. The occupier's housing costs can vary according to the type of mortgage and the size of the ownership share (e.g. 25%, 50% etc). Shared ownership occupiers have the right to buy further 25% tranches of the equity up to and including 100% (after one year’s occupancy), which means that they then become the sole owner. The share can not be reduced after sale.
Will I be eligible to apply to buy a shared ownership home?
- The housing association will assess applications from potential purchasers as and when existing sharing owners decide to place their property up for sale.
- Housing associations normally give priority to applicants who are social renting or those have never owned a home before (1st time buyers).
- Applicants who can afford to buy a house outright on the open market are not eligible, nor are those who could not properly afford to purchase a 25% or 50% share of the equity. The procedure HAs use for considering shared ownership applications includes a careful assessment of the applicant's financial circumstances. This requires verification from the applicant's bank or building society that he/she can truly afford and sustain all the costs.
If you want to more information, contact your local housing association – see Appendix A - Contact Details.
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