Frequently asked questions about shared ownership

We've put together the answers to the most common questions we receive about shared ownership. If there is anything you'd like to know that isn't listed here, please contact us by emailing here.

  1. What is shared ownership?
  2. How does shared ownership work?
  3. Who can apply?
  4. Do I have to live or work in the borough where the property is?
  5. I'm not a UK/EU/EE citizen or don't have indefinite leave to remain, am I eligible?
  6. How are properties allocated?
  7. What size property can I buy?
  8. What are my options after buying a Shared Ownership property (to buy more shares or sell)?
  9. Can I take in a lodger?
  10. Can I sub-let my Shared Ownership home?
  11. How is rent calculated?
  12. What are the typical costs involved with buying a home?
  13. Do I have to pay Stamp Duty with shared ownership properties?
  14. Am I eligible if I have a poor credit rating?

What is Shared Ownership?

Shared Ownership gives you the chance to buy a share in a home and pay a subsidised rent on the share you don't own.

How does Shared Ownership work?

You normally start by buying between 25% and 75% of the full value, and you can over time buy further shares until you eventually own outright.

You need to raise a mortgage to buy your share. If you have a large deposit or equity from the sale of a property, this can also be used towards purchasing your share.

We sell new build and occasionally refurbished properties, and we also refer buyers to existing shared owners who are ready to sell their share to a new buyer.

Who can apply?

Anyone who cannot afford to buy a suitable home on the open market, but who meets the general eligibility criteria and can afford to continue to pay the costs related to the property can apply.

As well as our priority groups, for example social housing tenants, Ministry of Defence personnel and home seekers identified as priority by their Local Authority, we also accept applications from other first-time buyers, this includes:

  • People living with parents or siblings
  • People living in private rented accommodation
  • People who need to move for work reasons.

Do I have to live or work in the borough where the property is?

No, but priority is given to applicants who live and/or work in the borough where the property is located. Secondary priority is given to those applicants who live or work in the neighbouring boroughs.

What size property can I buy?

You can apply for any size property but in line with our allocation policy, priority may be given to households whose size is more suitable for the property. For example, a couple with children may get priority over a single buyer for a three-bedroom home.

How are the properties allocated?

Once applicants are deemed eligible, priority is given to the following groups:

  • Housing association and council tenants and armed forces personnel
  • Local priorities, such as people who live or work in the borough or the sub-region (this may vary from borough to borough)
  • First time buyers.

What are the costs involved with buying?

To buy you'll need to be able to cover the cost of the mortgage valuation, survey, legal fees and stamp duty (if applicable). You will need access to at least £3,500 to £4,500 in savings. In most cases buying a home involves paying a mortgage deposit, which is in addition to the £3,500 to £4,500 needed to cover the costs of buying. The amount of the deposit required will depend on the mortgage provider you choose, the terms of the mortgage and your credit rating.

Once you've bought, every month, you will need to make the following payments:

  • Your mortgage repayment, which you make to the lender
  • Your rent, which is set at a low rate to help make your home affordable. You pay your rent to your housing provider (Silva Homes), based on the share of equity that you are yet to buy
  • If you buy a flat (or house on an estate with shared areas), you will also pay a service charge for maintenance and upkeep of these common parts.

Your financial assessment will help show the costs of these items and how affordable it is.

Do I have to pay Stamp Duty?

When you buy a share in a property through an approved Shared Ownership scheme you may have to pay Stamp Duty. You can find more information of Stamp Duty for Shared Ownership properties on the HM Revenue and Customs website by clicking here.

How is the rent calculated?

In 2001, the Government introduced rent restructuring rules. We follow these rules to work out your rent using a Government formula. We have to allocate your rent to what is known as a 'target rent'. The formula applies to rents only (not service charges).

The rent for shared ownership properties is 2.75% per year of the market value. The market value might vary and you will be advised at the time of your enquiry.

You would then pay rent on the portion of the property that you haven't bought.

For example: for someone who has purchased a 35% share (therefore the rent share is 65%) and the market value of the property is £210,000 the calculation is: 

£210,000 x 2.75% (=£5,775) x 65% = £3753.70

The annual rent would be £3753.70 or divided by 12 months, £312.81 per month

Am I eligible if I have a poor credit rating?

You will need to re-build your credit rating before you can buy.

If you are affected by a low credit rating, please let us know your situation.

I don't have UK/EU/EEA citizenship, or indefinite leave to remain - am I still eligible?

You are eligible to rent (providing your leave to remain covers the rental period). It is possible for you to buy through Silva Homes, if you can demonstrate you are able to take out a suitable mortgage, and maintain payments. This will be assessed on a case by case basis, usually by a Mortgage Advisor familiar with the both the scheme and mortgage lender requirements.

What are my options after buying through Shared Ownership?

You can buy more shares at a later date until you own 100%, if you wish to. This is called staircasing and the cost of the additional shares is based on the market value of the property at the time you buy the shares. If you increase your share in the property, your rent is re-calculated and reduced proportionately. Normally, you will be able to staircase as and when you can afford to. You can find out more about staircasing by clicking here.

If you want to sell your property, it will be marketed for sale initially by Silva Homes to allow other people in housing need to benefit from low cost home ownership. The property is resold at the market value of the property at the time of resale. For more information about reselling, please click here.

Are there any time restrictions on when I can buy more shares (staircase) or sell my property?

There are no time restrictions on when you can buy more shares in your home (staircase) or sell it. For staircasing you'll need to prove your affordability to purchase more equity.

What happens if I start a family and need a bigger home than the one I currently own?

You may be eligible to apply again and buy another home if you are in housing need, have Local Authority support from the borough you live in, and have sold your home before applying for a home. You should not spend any money on buying another property until you have had your application assessed and your eligibility confirmed. In order to be eligible you must still need government assistance to be able to buy a property suitable for your needs.

Can I take in a lodger to help with costs?

No. You need to be able to afford the costs of buying the home yourself. You will have a financial assessment carried out by a mortgage advisor before buying your home - the mortgage advisor will verify you can afford the cost of home ownership.

Can I sub-let my home?

No. Government money goes into affordable home ownership schemes, so there has to be control on who benefits from the scheme. Also, the mortgage lender may have terms and conditions about sub-letting.

If you need to go abroad for work purposes then we may give you permission at our discretion, but the rent cannot be more than your current service charge, rent and mortgage payment combined. Please contact your Neighbourhood Services Officer for advice on this.

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The place to buy your shared ownership home

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