Shared ownership

Shared ownership is a Help to Buy product that allows first time buyers and those that do not currently own a home to buy a share of a property. As a smaller deposit is required to purchase a share of a property, shared ownership creates a more accessible opportunity to get onto the property ladder.

How the scheme works

Shared owners pay subsidised rent on the remaining share that they don’t own, which is retained by us. They have the option to buy further shares in the property, a process called staircasing, until they own the property in full.

Buyers can start by purchasing as little as a 10% share of the property and staircase gradually over time. The share you can buy depends on your financial situation and typical purchases are between 10% to 75% of the property. You will need to purchase the maximum share you can afford to purchase and sustain as advised by a financial advisor.

You can find out more about how shared ownership works, whether you’re eligible, and the shared ownership properties that are available by visiting the Help to Buy website.

Your shared ownership home

A shared ownership property will be your home. The properties by Sheffield City Council are new build and so will be sold with certain fixtures. Beyond this the shared owner is responsible for the furniture, fittings and interior decoration, as well as home and contents insurance. There are however limitations, you will not be able sublet the property for example, nor make any major or structural adaptations. These restrictions will be outlined in your lease.

Should you wish to sell your property you can do so even if you haven’t staircased to owning 100%. The only restriction to this is you will need to contact us and give us 4 weeks to sell the property before you can take it to open market.

Repairs

As the leaseholder you are responsible for keeping the property in good condition. For the first 10 years, the external and structural repairs are part of a new build warranty and any work required that is covered under a warranty/guarantee should be claimed through the policy by the policy holder.

For some internal repairs there is a 10 year period where the shared owner will be able to claim up to a maximum of £500 in repairs and maintenance costs each year, or £1000 maximum on a roll over year of no previous claims. Application and restrictions of which will be outlined in the lease.

Financial costs

There are a number of costs involved in purchasing a home.

Deposit

Your required deposit will depend on the cost of the property you are intending to purchase, the price of which will be provided in the listing and legal documents. In most cases you will need at least 5% to 10% deposit of the share you are intending to purchase to get a shared ownership mortgage.

Example

For a £160,000 property, when purchasing a 25% share you will only need a mortgage to pay for the portion you are buying. 25% of £160,000 is £40,000.

A mortgage often asks for a minimum deposit of 5% to 10% of the £40,000. In this case that would be a £2000 to £4000 deposit required respectively.

The remaining 75% of the property would be owned by us – to which you’ll pay rent on.

You may also buy your share as a cash buyer, however to remain eligible for shared ownership you would need to prove you are unable to afford to purchase on the open market outside of a help to buy scheme.

Other costs of purchasing a home

In addition to a deposit, there are other costs of purchasing a home:

  • we charge a reservation fee to reserve the property you wish to purchase
  • some lenders will charge you an administration fee for a mortgage arrangement. Lenders will also require a valuation fee and will arrange this for you. These costs vary between lenders
  • you will need to instruct a solicitor to act on your behalf. The solicitor will give you an estimate of the legal fees you will have to pay. This will include their own fee, stamp duty (if applicable), land registry fees and other associated costs
  • the general costs of living in the home such as utility bills and council tax will be the responsibility of the Shared Owner. Some properties may also have a service charge, the cost of which will be outlined in the property lease

How to apply

If you believe you are eligible and shared ownership is of interest to you, then you can start your application on the Help to Buy website.

To apply for Sheffield City Council properties, ensure that you select Sheffield City Council as the provider during your application.

At this stage you should also consult with a Financial Advisor to find out if buying a shared ownership property is financially viable for you and apply for a mortgage in principle.

When applying for a mortgage in principle you should make sure your advisor is aware it is for a new build, shared ownership property as there are financial advisors that specialise in shared ownership mortgages.

What happens next

The completed Help to Buy application will be automatically sent to us on submission. You should then receive a communication from us that we have received your application, details about our shared ownership product and that we will be awaiting from your advisor your:

  • financial viability assessment
  • completed Homes England calculator
  • mortgage in principle

You may also be asked to provide to us:

  • proof of your identity (a full colour copy of your passport, photo driving license)
  • credit report
  • proof of savings to show you can afford the deposit and legal fees
  • bank statements for the last three months
  • proof of consistent income
  • documents showing details of any loan agreements
  • credit card statements for the last three months
  • a signed data agreement form

To complete your application with us you will be sent a property reservation fee form. Once we have received the reservation payment and signed form – the property will be reserved for an agreed set length of time.

We will assess your application and supporting documentation and decide whether you are eligible and can afford all the costings of a shared ownership home.

If you're accepted, we will send you an official offer to purchase a shared ownership property.

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