Giving you the chance to buy an affordable share of your dream home, Shared Ownership is an attractive starting point for aspiring home-buyers. But if you are hearing about the scheme for the first time, you might wonder - can I buy a Shared Ownership home outright?
Let’s start with the simple answer - yes, it is possible to buy all of your Shared Ownership property. However, getting to this stage is a little bit more complicated, involving a process known as Staircasing.
Want to find out more? From buying your initial share to eventually owning 100%, here’s everything you need to know about buying a Shared Ownership home outright.
What is Shared Ownership?
Shared Ownership is a part buy, part rent scheme that enables you to buy a small share of your home, and rent the share owned by your housing provider. This provides a more affordable path to home ownership for aspiring buyers, as it requires you to put down a smaller deposit than is usually expected. Although you only start with a share of your home, you will have the option to own all of your home in the future.
Learn more about Shared Ownership
Am I eligible for a Shared Ownership home?
For anyone struggling to buy their first home, buying a Shared Ownership property has obvious appeal. But before you can get ahead of yourself, you first need to find out if you are eligible. Many people believe that Shared Ownership is just for first-time buyers, but it’s also available to people who have bought a property before (providing that they are in the process of selling). For a full list of requirements, head to our Shared Ownership eligibility checker.
Shared Ownership eligibility explained
How much can I afford to buy through Shared Ownership?
To work out your Shared Ownership affordability, you’ll need to get in contact with a mortgage adviser who can assess your finances and decide what share you can buy. Paying close attention to your income, savings and any outstanding loans, this is the best way to avoid making a decision that will stretch you financially.
Although you only need to buy a portion of a Shared Ownership property, you still need to be aware of the various costs. Like with buying a traditional home, you’ll need to save up enough money for a Shared Ownership deposit, which will depend on the size of your share. For example, if you are buying 25% of a property that is worth £350,000, your share price will be £87,500. Your deposit will be around 10% of this share price, which is £8,750.
You’ll also have to factor in the price of rent, which is usually around 2.75% of the share still owned by your housing provider.
What is Staircasing?
If you want to buy all of your Shared Ownership property, Staircasing is the way to go about it.
This is a process where you buy more shares of your Shared Ownership property, usually after a set period of time (check your lease agreement for more info). So if you’ve started with a 25% share of your home, buying an additional 10% share would take you up to 35% ownership. The end goal is of course Staircasing your home to 100%, which allows you to own your home outright.
How much does Staircasing cost?
The cost will ultimately depend on the share size that you buy, and the value of your property. However, on average you can expect to spend around £2000 on buying additional shares of a Shared Ownership home. Bear in mind that buying a share of your home includes the added fees of buying a regular property (at a reduced rate). Make sure that your budget has taken account of added costs like valuation fees and mortgage fees, and up the Staircasing steps you go.
What are the benefits of Staircasing in Shared Ownership?
Everyone wants to be able to own all of their home one day, and Staircasing your Shared Ownership home makes this possible. Best of all, you can do so on your own terms - there is no obligation to do it straight away, so you can take as much time as you need.
Apart from that wonderful feeling of having a place to call your own, Staircasing can also benefit you financially. This is because the more shares you buy, the less rent you’ll be expected to pay. Should you plan to sell your home in the future, it will also put you in a better position to profit from your home’s increased property value.
