The Community Housing Group - Incorporating Wyre Forest Community Housing - Saturday November 22, 2008
Shared Ownership
Below we have set out a list of questions with answers as a guide to getting your foot on the property ladder through the Shared Ownership scheme.
If you still have questions or just want to talk to someone about the scheme please contact a member of our Strategy and Marketing Team on 01562 733035.
What is shared ownership?
Who can buy through the shared ownership scheme?
What kind of property can be bought through shared ownership?
How does shared ownership work?
What does the shared ownership lease entitle me to?
What are the running costs?
Can I make improvements or alterations to my home?
What if I fall behind with my mortgage repayments?
What if I fall behind on my rent or service charges?
What do I do when I want to sell?
What is shared ownership?
Shared ownership was introduced to help people who cannot afford to buy a home outright. Through shared ownership you buy a share of the property and pay a rent on the remaining share you do not own. Gradually you may buy further shares and eventually own your home outright.
Who can buy through the shared ownership scheme?
The scheme is intended for people who cannot afford to buy a suitable home in any other way. They must be in housing need and be unable to afford outright purchase. Priority will normally be given to those on local authority or housing associations' waiting lists.
Although you have not bought the property outright, you will have the normal rights and responsibilities of a full owner-occupier.
What kind of property can be bought through shared ownership?
Shared ownership homes may be new or renovated flats or houses which belong to Wyre Forest Community Housing. Prices vary according to location but are expected to be within the means of those people who cannot afford the prices of properties available for sale in the open market.
How does shared ownership work?
The scheme allows you to purchase a share of one of our designated properties. The share you purchase is funded by a mortgage which you will need to arrange with a bank or building society. The remaining share you do not own is rented from us.
The size of the share to be purchased will depend on your income and savings. Normally applicants buy a 50% share but you may be able to purchase a smaller or larger share (you can buy as much as 75%). The higher the share you purchase the less rent you will have to pay. You may also have to pay a service charge when you buy a flat. Later on, if you wish and can afford to do so, you can buy further shares in multiples of 10% until you own the property outright.
Remember that house prices can go up or down. This means that sometimes you might pay more for buying additional shares or have to sell at a price less than you originally paid.
When you purchase through shared ownership, we will grant you a lease which sets out your rights and responsibilities.
What does the shared ownership lease entitle me to?
Whether you buy a house or flat under shared ownership terms, we will grant you a lease usually for 99 years. It will entitle you to live in your home as an owner occupier, buy further shares (also called "Staircasing") and sell your property. Other points covered in the lease set out your responsibility for repairs and payment of rent and service charge. Although you have not bought the property outright, you will have the normal rights and responsibilities of a full owner-occupier.
What are the running costs?
Mortgage repayments
You may need to borrow all or part of the cost of your share from a building society or bank. Repayments will vary as interest rates change.
Rent
The monthly rent will be a proportion of the total rent for the property, and based on the proportion of the share you do not own. For example, if you own a 50% share you would pay 50% of the total rent. This rent will take into account the fact that you
are responsible for the costs of building insurance, maintenance and repairs.
The rent will be reviewed every year.
Council tax
You will have to pay the council tax to the local authority.
Repairs, insurance and service charges
If your home is a house, you will be responsible for all repairs and redecoration both internally and externally. We will insure
the structure of your home and you will have to pay a small management charge to cover this and to help meet the costs of rent
collection.
If your home is a flat, you will be responsible for all repairs and redecoration internally. We will undertake to keep the building in which your fl at is situated in good structural repair, to keep the structure insured and to keep any common parts, such as the staircase and corridors, decorated, clean and lit. You will have to pay a share of those costs. This is called a service charge (we will tell you how the service charge is spent and you will be consulted before any major repair or maintenance work is put in hand)
Heating and lighting bills and water and sewage charges
You are responsible for your own bills.
Fittings and furniture
You are responsible for supplying your own fittings and furniture and for the cost of insurance for the contents of your home.
Can I make improvements or alterations to my home?
If you wish to improve your home or make structural alterations to it, you must request written agreement to what you want to do.
What if I fall behind with my mortgage repayments?
The mortgage contract is between you and your building society/bank. If you begin to have financial problems which may mean you cannot pay your mortgage, you should let them know as soon as possible. If you do fall behind on your payments and cannot agree on a solution with your building society/bank, there is a risk that they will take possession of your home and sell it. You would be entitled to your share of the money received, after all your debts have been paid.
What if I fall behind on my rent or service charges?
Under the lease you will be obliged to pay the rent and service charge. Again, if you find you have financial problems, get in touch with us as soon as possible for advice.
What do I do when I want to sell?
You may sell at any time but you must tell us in writing that you want to move. You can either sell the part that you own or you can buy the remaining share and then sell the property outright. You will benefit from any increase in the value of the property according to the share you own, but you should be aware you may be affected by any fall in values.
Unless you own the property outright, clauses in the lease may enable us to nominate prospective buyers and to restrict the sale price to an independent valuers valuation. The reason for this is that we wish the property to remain available to the people for whom shared ownership is intended.
