Shared Ownership Scheme
- What was the Shared Ownership Scheme?
- What if I am still on the Shared Ownership Scheme?
- How did the scheme work?
- Who do I contact about the scheme?
What was the Shared Ownership Scheme?
The Shared Ownership Scheme was aimed at people on low incomes who could not afford to buy their own homes. Under the scheme, the local authority would buy part of the home and you would buy the other part. You would then make payments on a mortgage for the part you purchased and pay rent to the local authority for the other part. You could buy back the local authority share in your home over time until you owned the home yourself.
This scheme was available from 1991 until 2011 and is no longer open to new applicants. However, the rules of the scheme still apply for people who used it to start buying a home.
There are new affordable housing schemes available for people who need help buying their homes, such as the First Home Scheme (FHS) and the Local Authority Affordable Purchase Scheme.
What if I am still on the Shared Ownership Scheme?
Even though the Shared Ownership Scheme is closed to new applicants, the rules of the scheme still apply if you used it to start buying your home. For example, there are rules if you want to buy or sell your home.
I want to buy my Shared Ownership Scheme home
Under the scheme, you must fully own the home within 30 years. This does not mean that you have to repay all capital outstanding on the mortgage within the 30-year period. You can take out another mortgage to buy out the remaining local authority share when the original mortgage is paid off.
You can also increase the proportion of your home that you are buying at any time, either by adding to your mortgage or paying cash.
I want to sell my Shared Ownership Scheme home
You can sell your home at any time. The local authority will claim the value of the proportion it owns when you sell. If the local authority provided the home to you at a discount from the market value, you must refund a proportion of this discount, depending on how long you have lived there. Transactions under the Shared Ownership Scheme are exempt from stamp duty. Local authorities must also keep legal costs to a minimum.
How did the scheme work?
To qualify for the Shared Ownership Scheme you had to meet one of the following criteria:
- Be in need of housing and your income satisfied the income test
- Be registered on a housing waiting list with a local authority
- Be a local authority tenant or a tenant purchaser (if you wanted to buy a private house, you had to return your local authority house to the local authority)
- Be a tenant for more than one year of a home provided by a housing association under the Capital Loan Scheme and you wanted to buy a private home and return your existing home to the housing association.
You also had to:
- Get approved in principle for shared ownership by the local authority
- Identify a new or existing house or build a new house (some local authorities also had homes for sale under the scheme at a discount).
- Ensure that the home was suitable for your needs, met certain minimum standards and was acceptable to the local authority
If the local authority was satisfied that you could afford the mortgage repayments and the rent, it would buy the house or apartment and grant you a shared ownership lease. You had to buy at least 40% of the house or apartment.
Who do I contact about the scheme?
Contact your local authority if you have a question about your Shared Ownership Scheme home, or if you are having trouble paying for your home.