Key points on Shared Ownership

Key points on Shared Ownership

What is specified rent and gross rent?

Gross rent is the total rent payable if you are renting 100% of the property. If you are buying a proportion of the house, then the specified rent is the percentage of the gross rent that you will pay the Housing Association (for example it could be 40% or 50%).

 

Approval of Mortgage

The Housing Association needs to make sure that the mortgage allows the shared ownership scheme; it also protects the Housing Association in the event of repossession for unpaid mortgage; and it ensures the right amount is being lent. On the other side, the mortgage company need to be assured the shared ownership lease has a mortgage protection clause to protect them in the event of repossession for unpaid rent.

 

Buying Extra Shares

You may purchase further shares in the future known as stair-casing, and generally, you may stair-case until you own your home outright. An RICS valuer will need to value your property as further shares are based upon the current market value. You will incur legal and surveyor fees when stair-casing. Some properties may have a local restriction limiting the maximum share you can own to 80%. This is to help keep properties for local people.

Rent and on-going costs

Your discounted rent is due monthly and the amount depends on the share that you own. This amount will be reviewed annually. Service charges will vary between properties and will include the cost of insuring the building and may include ‘communal’ costs e.g. lift maintenance, cleaning communal areas etc. You are liable for all household bills e.g. council tax, utilities contents insurance etc. You will be responsible for your own repairs as a homeowner.
 

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