Frequently asked questions about shared ownership

We've put together the answers to some of 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.

What is Shared Ownership?

Shared Ownership allows you to buy a share of a home and pay a subsidised rent on the share that you don't own.

How does Shared Ownership work?

Most of our customers start by buying between 40% and 75% of the full value. Over time, they have the opportunity to buy further shares until they eventually own their property outright.

You first 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 refurbished properties, as well as 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 pay the costs related to the property, can apply.

We prioritise the following people:

  • social housing tenants
  • Ministry of Defence personnel
  • Home seekers identified as priority by their local authority

We also accept applications from other first-time-buyers:

  • 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 applicants who live or work in the neighbouring boroughs.

What size property can I buy?

You can apply for any size property, but priority may be given to households who are more suitable. 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 you will need to make the following payments on a monthly basis:

  • Your mortgage repayment, which you make to the lender
  • Your rent, which is set at a low rate to help make you home affordable. You pay your rent to your housing provider (Silva Homes), based on the share of the home 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 home through an approved Shared Ownership scheme, you may have to pay Stamp Duty. You can find more information about Stamp Duty for Shared Ownership properties on the  HM Revenue and Customs website.

How is the rent calculated?

In 2001, the government introduced rent restructuring rules. We use them 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, so 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.

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 both the scheme and mortgage lender requirements.

Can I buy more shares in my home?

You can buy more shares at a later date until you own 100% of your property if you wish to. This is called staircasing. 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 your property, your rent is recalculated and reduced proportionately. Normally, you will be able to staircase as and when you can afford to. 

The first step to buying more shares is to get a valuation of the property carried out by a Chartered Surveyor (the costs of this survey are met by the homeowner). For Bracknell residents, we can organise a valuation on your behalf at your cost. If you are happy with the valuation, write to us to confirm you want to proceed and the percentage you wish to buy.

There are some restrictions related to staircasing:

  • if you bought a new build shared ownership property you cannot buy more shares (staircase) for the first year
  • you must staircase by a minimum of 10% and by increments of 5% above that
  • some leases restrict the amount of times you can staircase and how much you can staircase to.

You should check your lease for details.

You will be responsible for all your legal costs, the valuation and an administration fee.

More information and an appplication form are available here:

How do I sell my home?

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. 

The first thing to do is to get a valuation carried out by a Chartered Surveyor (RICS). For Bracknell residents, we can do this for a fee or you can organise a valuation yourself.

Once the valuation is agreed and you wish to proceed, please write to us to confirm and include a copy of your Energy Performance Certificate (EPC), which is a legal requirement when marketing properties. An EPC lasts for 10 years from the date of issue.

You'll need to email photographs of your home, for example different rooms, garden, parking so they can be used in the advertising and marketing. Please send to neighbourhood@silvahomes.co.uk.

We will register your property on Help to Buy South,

which emails all the registered applicants interested in your type of property. We will deal with the initial enquiries and viewings will be done in line with your wishes.

Any interested applicants must pass a financial assessment and supply all the required documentation before the property can be offered. The valuation price is non-negotiable. The offer will be confirmed in writing to all parties and, once all the solicitors' details are supplied, will be passed for completion.

If there are no interested applicants in the marketing period, we will write to you to let you know that you can go to an estate agent to market your property.

You will be responsible for various fees depending on the terms of your lease agreement. 

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 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 your borough, 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 is 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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