FABRICA: Your guide to Shared Ownership

Collection of first time buyer homes available in Surrey

What is Shared Ownership?

Shared Ownership is an affordable way to buy a home which involves part owning, part renting a property. It’s designed to help people who can’t afford to buy a home at full market value and allows you to buy a share of a property (usually 25-75%) and pay rent on the part you don’t own. You’ll need to take out a mortgage to pay for your share. If wanted, you can increase your share until you own the entire property – this is called staircasing. You will also need to pay service charge for your home, which is usually charged on a monthly basis.

There are lots of good reasons to buy a Shared Ownership home:

• Buy chain free.
• Have a 10-year construction warranty from a leading warranty provider.
• Buy in a sought-after development in a high demand area.
• Own a skilfully produced, meticulously designed home in an area you want to live.
• Shared Ownership allows you to get on the property ladder as an owner-occupier, offering long-term stability without overstretching yourself.
• Deposits are generally lower than buying on the open market.
• Shared Ownership makes mortgages more accessible, even if you’re on a lower wage.

How does it work?

The price of the share you buy is determined by a property valuation, carried out by a Royal Institution of Chartered Surveyors (RICS) qualified surveyor. On the share of the home you don’t own, you will pay rent to the Housing Association. For example, if you purchase 40% of your home, you will pay rent on the remaining 60%. You will need to have a financial assessment to establish the maximum share you can afford to buy.

What will you own?

Shared Ownership properties are always leasehold. This means that you own the property for a fixed period, usually 125 years, and will have the normal rights and responsibilities of a traditional purchaser. The Housing Association will act as the landlord and will own the share that you don’t own.

How much will it cost?

The level of deposit you need depends on the cost of the share you are buying and the mortgage you choose. In addition to your monthly mortgage and rent payments, you will need savings of around £4,000 to cover the cost of the survey, legal fees and Stamp Duty (if applicable).

You will be liable to pay Stamp Duty Land Tax (SDLT) on the full value of the property, although there are two options available for how you choose to pay:

• You can choose to make a one-off payment based on the total market value of the property. In this case there will be no further SDLT charges at a later date.
• SDLT is paid in stages, i.e. you only pay Stamp Duty on the share that you own, making additional Stamp Duty payments each time you staircase to own more of the property.

If you want to buy more shares, the cost of your new share will depend on how much your home is worth at the time of buying the additional share. If property prices in your area have increased, you will pay more than you did for your first share. If your home has decreased in value, your new share will cost less than your initial share. Buying additional shares will reduce the amount of rent you pay. If you staircase to the point where you own outright, you will no longer have rent to pay.

Eligibility

There are some eligibility requirements that must be met in order to buy a Shared Ownership home – these include:

• You must be at least 18 years old.
• Outside of London, your annual household income must be less than £80,000, or £90,000 if you are in London.
• You cannot own another home, if you do already own another property (either in the UK or abroad), you must be in the process of selling it.
• You should not be able to afford to buy a home suitable for your housing needs on the open market.
• You must show you are not in mortgage or rent arrears.
• You must be able to demonstrate that you have a good credit history (no bad debts or County Court Judgements) and can afford the regular payments and costs involved in buying a home.
• You should have savings or be able to access at least £4,000 to cover the costs of buying a home (this is a guideline; the actual amount may vary).
• You will generally need a deposit of between 5-10% of the equity share that you are purchasing.

Featured Developments

Elizabeth Park

Location: Hersham, Surrey.

Transport: Thames Ditton Station (2.96 miles).

Prices from: £119,000 for a 40% share.

Monthly cost: £1,136 (Rent £409, Service charge £134, Mortgage £593*).

*Calculated using a representative rate of 3.94%

A new collection of one and two bedroom apartments located in a welcoming town of Hersham, which provides residents with the very best of out of town living: a picturesque riverside setting and a thriving community spirit. Nearby are plenty of green spaces, superb eateries and historical places of interest, while London is also within easy reach. Elizabeth Park is located a short distance in between both Hersham and Walton-on-Thames station.

Water’s Edge

Location: Mytchett, Surrey.

Transport: Farnborough (1.80 miles).

Prices from: £126,000 for a 40% share.

Monthly cost: £1,189 (Rent £433, Service charge £128, Mortgage £628*).

*Calculated using a representative rate of 3.94%

A collection of two bedroom apartments, Water’s Edge is a new lakeside community, perfectly situated in the Surrey countryside with great commuting links, keeping you connected to city life from an oasis of calm. A hand-picked location that benefits from an abundance of natural beauty on your doorstep.

Walton Court Gardens

Location: Walton-on-Thames, Surrey.

Transport: Walton-on-Thames (0.30 miles).

Prices from: £112,000 for a 35% share.

Monthly cost: £1,172 (Rent £477, Service charge £137, Mortgage £558*).

*Calculated using a representative rate of 3.94%

A new chapter now begins at Walton Court Gardens as it takes on a new lease of life with a collection of 27 Shared Ownership one, two and three bedroom apartments where residents can enjoy beautifully landscaped gardens, a gym and a home finished to superb specification. A stone’s throw from Walton-on-Thames train station, and minutes from the bustling town centre, this exciting new FABRICA development sees beautiful landscaping and striking architecture come together.

Share to Buy is a one stop shop for affordable homes. On our website, you can search for properties, compare mortgages and find out all you need to know about alternative home buying schemes such as Shared Ownership and Help to Buy.