At the moment, the UK's housing market is a hot pot.
Rents have been increasing at an all-time high; the landlords who are managing the rented properties are selling their homes, reducing the housing supply on the market and pushing up prices; the interest rates are the highest since 2008, making home buying more difficult than it already was.
Living in the UK is not as easy as it used to be. One viable solution for many, though, has been Shared Ownership. Designed to help jump onto the property ladder for first-time buyers, it's a part-rent-part-own model which enables people to live in their own home at a lower cost.
Most ask though: because it's a Government scheme, am I actually eligible for this?
The answer? Most likely. Read on to learn about the requirements.
SO Resi Hendon Waterside during construction
In 2016, the Government removed all the restrictions, giving an advantage to priority groups, making the scheme on a first-come, first-served basis. Yet, there are specific requirements that one must follow; we've compiled a simple summary here:
- You must be at least 18 years old and a permanent UK resident
- Your household income must be £80,000 a year or less (£90,000 a year or less in London)
- You cannot afford all of the deposit and mortgage payments for a home that meets your needs
- You cannot own another home
The purpose of the scheme is to help anyone to have their own home to live in. You cannot use the property for subletting, make any structural works, or use it as a second home. And no, you cannot AirBnBing your Shared Ownership home!
However, one of the biggest concerns that we hear is about the minimum income requirement. In fact, potential buyers need to pass the Initial Eligibility and Affordability Calculator provided by the Government. To make it easier, we've created a digital calculator on each of our listings, so you don't have to worry about the maths; you can see an example in our development in Whetstone. Beware, though, that this digital version is not as accurate as the one provided by the government; this only gives a rough estimate.
The Minimum Income calculators oftentimes only provide general guidelines and are not a real substitute for the official governmental calculator. If you see that you are not eligible, for example, you may have a high deposit instead that would require less funding from a mortgage or salary, so it's always worth talking this through with the sales consultant and your financial advisor.
The affordability calculator is designed to make sure the property is affordable, now and in the future and that you still have funds to still enjoy the things you love to do!
Completion at SO Resi Cambourne for this very happy couple
Another important point is to have a good credit score. As the model is part-rent and part-buy, you might need to obtain a mortgage from your bank or specialized financial institution. Having good credit means credibility and eligibility to the lender and this is a metric that they always check. You can use services like Experian and Equifax to see where you currently stand.
The Shared Ownership scheme might sound more complex than it actually is. You can see more information about the model and how it works on our website, where you can find video explainers and article guides.
You can find the Government reference on their website.
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Whilst you're here, take a look at our other blogs for the latest interior trends and our favourite first-time buyer hotspots. You can also stay tuned by following us on Instagram, Facebook, and Twitter.
Written by the SO Resi In-House Team