Wiltshire Council Shared Ownership
What is shared ownership?
Shared ownership or part buy/part-rent offers you the chance to buy a share of your home and pay rent on the remaining equity share and is designed to help you buy a home of your own.
There is also Older Persons Shared Ownership (OPSO), available for those aged 55 or over that enables you to part buy or rent a purpose built home. This may be because you are looking to downsize, or simply because your current home is no longer meeting your needs. Shared ownership is one alternative option to renting or full ownership and may be suitable if you cannot afford to buy a home outright.
You will have the same rights and responsibilities as any other homeowner, which means you will be able to decorate as you please! If you would like to make big changes, such as knocking down a wall or adding on an extension you will need to ask the Council's permission first. This is because it could change the value of your home.
When I part buy/part-rent my home, what am I buying?
You will be purchasing a leasehold home and this will be either a new build or resale home. However, as you are not buying the whole of the property outright, you will be paying rent on the remaining portion.
The minimum share you can buy is 10% and you have the option to buy further shares if you are able to. This is known as "staircasing". The price you pay for further shares is based on an updated valuation of your home. See section Can I buy more shares?.
Am I eligible?
You are eligible to buy a shared ownership home if:
• you cannot afford to buy a suitable home on the open market
• you have a household income of less than £80,000 a year
• you have a local connection to the Wiltshire area
• you are assessed as being able to afford a shared ownership home
Will I need a mortgage?
You will need to pay for your share of your home before you move in. You can either pay this in full, or you can take out a mortgage on the share you own. The good news is, because you only need a mortgage for the share you are purchasing, the amount of money required for a deposit is usually a lot lower than would be required if you were purchasing outright.
How much will I pay?
Shared ownership is designed to give you the chance to buy a share of your own home if you can not afford to purchase a home on the open market. You will need to pay some one-off costs, such as your solicitor's legal fees and any stamp duty land tax and make monthly payments to cover your rent and
One-off fees (payable before completion)
- Legal costs for the buying process (known as conveyancing)
- Stamp duty (although many properties are below the current threshold)
- Mortgage adviser fee if a mortgage application is submitted
- Mortgage valuation fee and any arrangement fees charged by your mortgage provider
- Removal costs
- Reservation fee (applicable for new builds only; normally £250) which is deducted from the final sale price of your share
- Mortgage deposit - usually a minimum of 5% of the share you are purchasing
- Up to two months' worth of rent and service charges, paid in advance before you move in.
Ongoing costs (every month)
- Service charges
- Saving for repairs
- Buildings insurance
The example below shows you how to calculate what you'll need to pay up front and in rent if you take a 40% share in a shared ownership property worth £200,000.
Property value: £200,000
Your share: 40% (£80,000)
Remaining equity share: 60% (£120,000)
Rent/year (charged at 3%): £120,000 x 3% = £3,600/year
Rent/month: £3,600 ÷ 12 = £300/month
How do I get a mortgage?
You may speak to an Independent Financial Advisor (IFA) to recommend a mortgage lender and product to suit you. You may have to pay your IFA once you have taken out the mortgage, although advice is usually free. You can find an IFA on the Help to Buy agent's website: www.helptobuysouth. co.uk. They are not employed by either the Help to Buy agent or the Council, so their advice is impartial.
Will I need legal advice?
Yes. Your legal responsibilities when buying a shared ownership home are no different to buying a home outright. It is advisable to appoint a solicitor to act on your behalf, who can deal with the conveyancing process (the legal transfer of the title to you). They are also needed to help you understand the terms of your lease and deal with the Council's legal team. You may find a solicitor via the links on the Help to Buy agent's website: www.helptobuyagent3.org.uk.
Can I buy more shares?
Depending on the terms of your lease you may be able to buy more shares when you can afford to. This is known as 'staircasing'. You may be entitled to staircase to 100% meaning that you will own the whole of the property and no longer be required to pay rent.
The cost of any further share will depend on the market value of your home at that particular time. To assess this, we will arrange for a valuation to take place, but you will need to cover the valuation fees. The price of the additional share you want to purchase will be calculated on this new valuation.
How do I sell my home?
There may come a time when you want to move on. If you are able to staircase to 100% and acquire the freehold to your home, you can put it up for sale yourself although the Council may have the right to buy it back at a price determined by an independent valuation. This is known as 'first refusal' and is valid for 21 years after you fully own your home. If you own a share in your home, we have the right to try find a buyer for it. If we cannot find a buyer within a stated number of weeks you will be able to advertise the home to the open market.
Advertising and allocating the houses
In addition to other forms of advertising, new homes will be advertised (for sale at market value) via Homes4Wiltshire and the Shared Ownership properties page; this will take place approximately a minimum of 6 to 8 weeks before the homes are ready to be occupied.
Homes4Wiltshire is a choice-based lettings scheme for people in housing need seeking affordable accommodation operated by Wiltshire Council. The homes will be advertised until they have been successfully sold to applicants, with shortlists being checked twice weekly. Eligible bids will be referred for affordability assessment. On receiving multiple eligible bids which pass the affordability assessment, the selling of the houses will be in accordance with Wiltshire Council's Allocation Policy, which determines the ranking of each bid by parish connection, band and finally the date that an applicant is placed in the particular band. Full details of the Allocation Policy are available on the Homes4Wiltshire website.
How to apply and further information
If you are interested in moving to a new shared ownership home, it is strongly recommended that you register now, expressing your interest for shared ownership housing on www.homes4wiltshire.co.uk, or call 0300 456 0104 for registering assistance. Should you not have access to the internet, relatives and friends are able to assist you with registering online, you do not need to complete the application yourself. You will only be able to bid for shared ownership houses if you are registered.
This guidance note is for information purposes and the Government's shared ownership policy may have changed since this guidance was produced.