SmartShare is the first national property website that is dedicated to affordable homes including shared ownership and shared equity homes. We have detailed below many of the answers to the frequently asked questions we receive each day.

When you are ready to find your new home, please go to our website www.smartshare.co.uk to view thousands of properties available throughout the UK from many of the leading housing associations and top shared equity developers.

Question: What is shared ownership?

Shared ownership is a great way for all kinds of people to afford their own, new home at a fraction of the price.

Shared ownership is also known as part buy, part rent because shared owners buy a share in their home and pay a reduced rent on the rest. Gradually you may want to buy further shares and eventually own your home outright.

Question: Who is shared ownership for?

Shared ownership is open to a wide range of people who would like to get on the housing ladder.

For example:
• First time buyers
• Previous home owners who are unable to afford to buy without supplementary help (perhaps due to a separation, divorce or bereavement)
• Housing association or council tenant
• ‘Key worker’ (a key public sector worker e.g. nurse, teacher, fire fighters, police officers)

The main criteria to become eligible for a shared ownership property are:

• Your household income must be no more than £60,000 per annum
• You must not own another property

Note: Up to four people can become joint owners but all joint applicants must individually and jointly meet the eligibility criteria.

Question: What kind of property can be bought through shared ownership?

Shared ownership is a great way for all kinds of people to afford their own, new home at a fraction of the price.

Whether you are looking for a new or renovated property or one bedroom apartments to five bedroom family homes – available throughout the UK- there is a property to suit everybody’s growing needs

Question: How does shared ownership work?

The shared ownership scheme allows you to purchase a share of a property and is usually part-funded by a mortgage.

The size of the share that you can buy is between 12.5% and 75% of the value of the property, dependent upon your individual circumstance.

Shared owners pay a monthly rent on the remaining share that has not been purchased.

For example: you may wish to purchase a 25% share of a property. The remaining 75% share will be owned by the housing association and you will pay a reduced rate of rent on this share.

Note: Up to four people can become joint owners but all joint applicants must individually and jointly meet the eligibility criteria.

Question: Is it cheaper to rent than buy a shared ownership property?

In many areas of the UK, yes it can be cheaper to rent a property than to buy a shared ownership home and in some circumstances it is the best option as you have no ties other than to uphold the terms of the contract.

There are many people who see renting as ‘dead money’ as the money lines the landlords pocket and the renter sees nothing at the end of the term. Buying a shared ownership home is one affordable way of putting a foot on the property ladder (although it is essential to remember property values can rise as well as fall).

SmartShare is the first national property website that is dedicated to shared ownership homes and we have thousands of properties available throughout the UK from all the leading Housing Associations.

When searching for properties to ‘buy’ on our website you will see an average savings table that provides an estimated cost of ‘buying outright’ versus ‘buying a share of an affordable home’. The average savings illustration is based on purchasing a property outright versus purchasing a 25% share of a Shared Ownership property using an average repayment mortgage of 5.25%.

Click here to go to our website www.smartshare.co.uk

Question: What are the benefits of buying a shared ownership property?

Shared ownership is a great way for all kinds of people to afford their own, new home at a fraction of the price.

Benefits:

• Buying a shared ownership property can be cheaper than renting.
• The scheme is open to all kinds of people not just first time buyers or key workers.
• A smaller deposit is required than with an outright purchase
• You only need to secure a small mortgage.
• Small mortgages represent less risk for you and the mortgage company.
• The rent on the share that you don’t buy will be subsidised.
• As your income increases, you can choose to buy more shares in the property.
• Some schemes enable you to purchase 100% of the shares.
• Shared ownership properties are available throughout the UK so if you are re-locating there could be a property development available.
• Whatever your personal circumstance, your feet will firmly be on the first rung of the housing ladder.
• As the property market begins to rise again the value of your property could increase.

Question: What costs are involved in buying a shared ownership property?

Shared ownership is a great way for all kinds of people to afford their own, new home at a fraction of the price.

When thinking of buying your own home, you must consider all the costs involved and work out what you can afford on buying and running a home.

The initial costs of a shared ownership home are as follows:

• Property survey
• Legal fees
• Deposit
• Stamp duty
• Mortgage arrangement fees
• Removal costs

What are the running costs?

• Mortgage repayments
• Rent
• Council tax
• Service charge
• Heating, lighting, water bills

Remember you will also need to allow for every day essential items e.g. food, clothes, etc.

Question: What is shared equity and is it the same as shared ownership?

Shared equity is different to shared ownership.

Shared equity allows a borrower to buy a new house in partnership with a developer with incentive terms attached e.g. a reduced interest rate or payment holiday for a defined period. Ultimately you will have to purchase 100% of the property which is generally funded through a mortgage.

SmartShare is the first national property website that is dedicated to affordable homes including shared ownership and shared equity properties. There are thousands of properties available throughout the UK from all the leading Housing Associations and developers, click here to go to the website www.smartshare.co.uk.

Question: What is the ‘rent to buy’ scheme?

‘Rent to buy’ is for people who could qualify to buy a shared ownership property but cannot afford the deposit for the mortgage. In these circumstances you can rent the property, normally for up to three years, at approximately 80% of the market rental value. You can then save the 20% discount you are getting to build up a deposit for your mortgage. Once you have enough money put aside you can then purchase the property on a shared ownership basis. Sometimes people call this scheme "try before you buy".

Question: What is the HomeBuy scheme?

The HomeBuy scheme is the government’s housing solution facilitated through the HCA (Homes and Communities Agency).

The schemes are run by HomeBuy agents, who can help you through the application process to buy a home on a scheme.

HomeBuy agents are appointed housing associations - non-profit organisations that manage housing for people who have difficulty buying a home.

If you think you are eligible for help to get a home through a HomeBuy scheme, contact the local HomeBuy agent for the area where you want to live.

Click here for a list of HomeBuy agents: http://www.smartshare.co.uk/frequently-asked-questions-about-affordable-...

The current types of HomeBuy are as follows:

New Build HomeBuy, under which purchasers buy at least 25% of a newly-built home, and pay rent on the remainder. The HCA generally subsidises housing associations or other providers to hold the remaining share. The rent is capped at 3% of the value of the unsold share, but typically set at 2.75%. Purchasers may buy additional shares whenever they can afford to do so; this is known as "staircasing".

Rent to HomeBuy is a variation launched in July 2008. It allows applicants to rent their new home for less than market rent (intermediate rent) to enable them to save for a deposit. Within five years, the tenant has a right to purchase a share in the home.

HomeBuy Direct is a new form of shared ownership introduced in 2009, under which the government and a housing developer jointly fund an equity loan of 30% of the valuation, so that the purchaser only needs to pay a mortgage on 70% of the value. If the purchaser buys an additional share, all three parties participate in any increase in value. The HCA allocated £300 million to the scheme for 2009—2011, and 10,000 homes are available under the initiative.

Open Market HomeBuy allowed purchasers to buy at least 25% of a property on the open market, with a conventional mortgage on that part, and a low-interest loan on the remainder. This is not currently available as the funding for 2009-10 has already been fully committed. Over 6,000 households used the scheme in 2008/09.

Social HomeBuy allows tenants of participating Councils and housing associations to buy their rented home on shared ownership terms, with a proportion of the usual Right to Acquire discount.

The First Time Buyers Initiative is an older scheme aimed at first time buyers who can arrange a mortgage for at least 50% of a home. The Government provides an equity loan for the remainder which is interest-free for the first three years, rising to 3% after 5 year. d.

To apply for all HomeBuy schemes, applicants must contact their local HomeBuy Agent.

A guide to buying a shared ownership property

Buying a new home is one of the most important decisions you will make in your life time and it can be immensely stressful. It is important to be aware of each step you will need to complete before you get the keys to our new home but please note they could vary dependent upon the housing association.

Step 1—Applying to buy

An application form must be completed.
The details can be taken over the telephone at a time convenient to you. The form will then be sent to you to check over and sign.
Once this has been done, the form will be sent to the property organisation on your behalf and followed up by your account manager.

Step 2—The response

Your application will be processed and all the information will be considered with regards to your eligibility.
If successful the purchase price will be confirmed and you agree the size of share you wish to buy.

Step 3—Arranging a mortgage

There are many specialist companies who deal in shared ownership mortgages. Ask your housing association for their recommendation.

Step 4— Purchasing the home

Once you have been offered a mortgage, you will need to find a solicitor who is a specialist in purchasing shared ownership properties. Ask your housing association for their recommendation.

The organisation who is offering the property will send a copy of the draft lease to the solicitor who will advise you what it says, approves it on your behalf, makes a local authority search, and investigates the title to the property.

At this point you will be advised of the confirmed amount of rent and service charge you will have to pay on the remaining share you have not bought.

The purchase can then be formally completed and the house or apartment will be yours.

Step 5— Buying further shares in the home

If you want to buy a further share, you will need to write to the organisation that the property has been bought from detailing the share you wish to purchase. The full procedure will be in the lease document.

The organisation will get the property valued when it receives the letter and will let you know the cost of the further share. You will have to pay the valuer’s fee. You should be given three months to arrange a mortgage and complete the purchase of the further share.

Question: Why do I need to register with the HomeBuy agent as well as the housing association?

Anyone buying a shared ownership property in England and Wales must register with the local HomeBuy agent as well as the Housing Association selling the property. Local HomeBuy Agents work with local authorities and other housing associations to provide HomeBuy options to people in housing need.

Question: What does the shared ownership property lease entitle me to?

Whether you buy a house or a flat under shared ownership terms, you will be granted a lease usually for 99 years. It will entitle you to live in your home as an owner-occupier. It will also entitle you to buy further shares in the property and sets out how you can do this. It also states how you can sell your property.

Other points covered in the lease set out your responsibility for repair and payment of rent and service charge. Although you may not have bought the property outright, you will have the normal rights and responsibility of a full owner-occupier.

Question: Can I make improvements or alterations to my new shared ownership home?

If you wish to improve your home or make structural alterations to it, you must write to the shared ownership organisation requesting written agreement to what you want to do.

Question: What if I fall behind with my mortgage payments?
The mortgage contract is between you and your building society/bank. If you begin to have financial problems which may mean you cannot pay your mortgage, you should let them know as soon as possible. If you cannot agree on a solution, there is a risk that they will take possession of your home and sell it. You would be entitled to your share of the money received, after all your debts have been paid.

Question: What if I fall behind with my service charges?

Under the lease you will be obliged to pay the rent and service charge. If you find you have financial problems, get in touch with the shared ownership organisation to see if they can advise you.

Question: What do I do when I want to sell?

In most cases, you may sell at any time but you must write to the shared ownership organisation informing them that you want to move. You can either sell the part that you own or you can buy the remaining share and then sell the property outright.

Remember, you will benefit from any increase in the value of the property according to the share you own, but you should be aware that you may be affected by any falls in value.

To find your new affordable home please go to www.smartshare.co.uk