What is Shared Ownership?
Shared Ownership is a ‘part buy, part rent’ way of owning your own home for a smaller upfront payment – making it easier for buyers to get on the property ladder.
So, what does ‘Shared Ownership’ mean? When buying a Shared Ownership home, initially you can buy anywhere between 25% and 75% of the home. You would take out a mortgage for the share you are buying, or in some cases you can be a cash buyer. On the outstanding percentage of the property that you don’t yet own, you pay a subsidised rent. The combined monthly mortgage and rent payments are often less than if you were to buy the home outright and can sometimes be less than if you were renting.
Properties available through Shared Ownership allow you to buy the share you can afford now without the need for a large deposit upfront, and you can increase your ownership when the time is right for you. This is known as staircasing. You can also sell your share in the property at any time.
Why should I buy a Shared Ownership home?
Buying a Shared Ownership home is a great choice for buyers no matter their circumstance; whether looking to get a foot on the property ladder, providing your family with more space, or downsizing. When you buy a Shared Ownership home, you have the opportunity to reduce your monthly outgoings. Many find the combined cost of their Shared Ownership mortgage, rent and service charges cheaper than renting privately. Some key benefits of Shared Ownership properties are:
The rent is less than the rate charged on the open market and usually charged at 2.75% of the property value per annum.
In many cases, you can start with a little as 25% share.
Your deposit will be a percentage of the price of the share, not of the full market value of the whole property.
Stamp Duty Land Tax (SDLT or simply ‘stamp duty’) on Shared Ownership homes can generally be deferred until your share reaches 80%.
New Shared Ownership homes with Sage are built by the UK’s top housebuilders.
What does ‘Part Buy, Part Rent’ mean?
‘Part Buy, Part Rent’ is a way of owning your home. This simply means you buy a share (or ‘part’) of the home e.g. you own 40%, which will require funding, normally by a mortgage. On the remaining 60% share, you will then pay a subsidised rent – this means you are purchasing a leasehold house or flat.
When buying a part buy, part rent property, in most instances, you have the option to buy further shares and increase your ownership to 100%. The price of buying further shares will be based on an independent valuation at the time you purchase the additional share. If your home is a house, you would be transferred the freehold of the property once you own it outright. Flats will remain leasehold when you staircase to 100% as you are not able to own the land that the block sits on.
Shared Ownership Eligibility
When considering eligibility for Shared Ownership properties, the scheme is available to those looking to own their own home but are unable to purchase on the open market. If you meet the following criteria, you are considered eligible to buy through Shared Ownership:
- Your annual household income must not exceed £80,000 (£90,000 per annum within Greater London).
You must not currently own a property in the UK or overseas.
You are a British or EU Citizen, or you have the right to remain in the UK.
You must be over 18 if you are applying for a mortgage.
You must have sufficient savings in addition to your deposit to cover the cost of legal fees and mortgage arrangement.
Please note on some developments (scheme dependent), priority is given to those who work or live in the Borough that the development is situated in. We will let you know where this applies.
Where can you buy a Shared Ownership home?
Sage works with the top housebuilders in the UK to offer a range of new build homes throughout the country. On our website you will find our Shared Ownership homes available across England, and you will also find information about new build properties that are coming to the market soon.
With Shared Ownership homes available across the whole country, Sage works very closely with local Estate Agents to help us advertise and manage the sales of our homes. The selected Estate Agent will be who you speak with once you register your interest in a new home.
On our About Us page you will see a list of Housebuilders and Sales Agents we work with and within each development page you will find the name of the Sales Agent managing the sales for Sage.
How can I buy more shares of my home once I have moved in?
You may only be able to afford to buy a 25% share of your home when you first move in. Over time, your financial position may change so that you can buy 50%, 75% or even 100% of your home. This process of buying larger shares in your home is known as staircasing.
You can staircase all the way up to owning 100% of your home. You can staircase three times, buying a minimum additional share (typically 10%) each time. Our Homeownership Services Team can help you buy a larger share of your home whenever you choose to do so. There are some exceptions to buying outright, and in these cases we or the Agent will tell you at the beginning of your purchase. We will highlight any restrictions on the maximum share you can own, which will be set out in your lease, to you and your solicitor.
Will staircasing cost me anything?
Each time you staircase, you have to get your property valued. You’ll need to pay the costs of this valuation. You will also be required to pay an administration fee to Sage.
You will also be responsible for paying your legal costs and you may also have to pay fees to your mortgage lender. You may also be liable for additional Stamp Duty costs when you staircase.
Will my home need to be valued?
Yes, under the terms of your lease you are required to instruct a RICS qualified surveyor to value your home. The new valuation of your home will determine the cost of buying an extra share in it.
The value of the property could increase or decrease based on housing market conditions, so you may find your home is valued at more or less than the original price you first paid for it.
Can I sell my Shared Ownership home?
You can sell your property at any time. If you own a share in your home and want to sell, the Homeownership Services team will help you find a buyer. Within your lease, Sage are given the first opportunity to re-sell your property to another Shared Ownership buyer. This is so that another person has a chance to buy their home under Shared Ownership, just like you did.
If you have staircased to owning 100% of your home you can sell it on the open market.
Remember, the value of your home could have gone up or down since you first bought it, depending on housing market conditions.