Shared Ownership Scheme

The Shared Ownership Scheme was introduced in the 1980s, but recent changes have been made since April 2021. This scheme offers people the opportunity to buy a share of their home to make it easier to climb the property ladder. To be eligible for the scheme, you must be a first-time home buyer, over 18, have a maximum household income of £80,000 or less and prove that you cannot afford to buy the property outright. The amount you purchase can range from 10% -75% and you will then have the option to purchase more shares or the entirety of the property once you are able to afford it in the future, which is known as ‘staircasing’. 

This blog will discuss the recent changes to the Shared Ownership Scheme since April 2021 which include changes to the following: minimum share, staircasing and repairs and maintenance. 

Minimum share: 

The minimum share in which you can purchase a shared ownership property has now decreased from 25% to 10%. This means that you can start by purchasing only 10% of the property and renting the remaining 90% which makes it easier to get on the property ladder. 

Staircasing:  

Staircasing refers to the gradual process of purchasing more shares until you reach 100% ownership of the property. Previously, staircasing had to start from 10%, but this has changed, and people are now able to staircase from 1% increments; this offers greater flexibility for those with a smaller budget. 

However, it is important to note that you will be responsible for paying any legal fees and mortgage fees every time you decide to staircase. Due to the excessive costs, it is recommended that individuals save up and staircase in one go as opposed to instalments.  

Repair and maintenance: 

Shared owners are responsible for paying for any repairs such as boiler issues or leakage, however, one of the most positive changes that the government has introduced within the Shared Ownership Scheme is that the property owner or housing association will be responsible for repair and maintenance costs related to external or structural repairs but do not cover internal repairs. Regarding internal repair and maintenance, you can now claim up to £500 per year which is available on new build properties for up to 10 years. If you do not use all the £500, then it rolls over to the next year. It is important to be aware that you must prove that there is an issue and that you were not the cause of it. Additionally, if you staircase to 100% of the property before that time, then the housing association are no longer responsible for repair and maintenance costs. 

Conclusion: 

The Shared Ownership Scheme and the recent changes that have been made have been positive. This scheme makes it easier and quicker to get onto the property ladder, especially for first time buyers. It is important, however, to consider the recent changes and to check whether you are satisfied with the rules of the housing association before joining the scheme.  

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