Valuations – Shared Ownership

A valuation report may be required if you want to buy more shares, borrow more money on your mortgage, or sell your home.

If you have been asked to provide a valuation report, this needs to be carried out by a surveyor who is registered with the Royal Institution of Chartered Surveyors (RICS) rather than an estate agent’s valuation. Ian Young is an RICS Registered Valuer and will visit your home and look at what similar comparable properties have sold for to work out the market value of your home.

Why do I need a valuation?

The Shared Ownership scheme is funded by the Government to help people get on to the property ladder. In order to protect this public investment, a valuation from a professional surveyor is required.

This helps both you and owner of the share be sure that the value is correct when we are working out how much your share is worth.

Help to Buy Scheme Explained

To assist a first time buyer, The Government started Help to Buy schemes, which can help you get onto the housing ladder

 If you are selling or re-mortgaging you will need a market value of your property in order to conclude the help to buy scheme

 

What is the Help to Buy ISA?

The Help to Buy ISA is a saving scheme for first time buyers.

Those who deposit their savings into a Help to Buy ISA will receive a 25% bonus up to a maximum of £3,000 when using the savings to purchase a house.

The scheme is available until 31.12.16

For more information on this scheme please visit

https://www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/

 

 What is the Help to Buy Equity Loan scheme?

The Government lends you up to 20% of the cost of your new-build home, so that you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest. You will not be charged loan fees on the 20% loan for the first five years of owning your home.

What happens with the 20% Equity Loan after the first five years?

The equity loan is interest free for the first five years. After that, you will pay a fee of 1.75%, rising annually by the increase (if any) of the Retail Price Index (RPI) + 1%.

Can I pay off the Equity Loan before the end of the first five years?

Yes, following the purchase you can choose at any time to make voluntary part repayments or a full repayment, based on the market value at that time. The minimum voluntary repayment is 10% of the market value at that time.

What is Shared Ownership?

Shared Ownership (previously been known as “Part Buy, Part Rent”), allows you to buy an initial share in a new home, that you can afford, and helps you get into home ownership in manageable stages. Your Housing Association or Registered Provider will offer initial shares of between 25% - 75% of the full purchase price. You pay a subsidised rent on the remaining share that the Housing Association or Registered Provider still own. The combined monthly cost of mortgage and rent will normally be substantially less than if you were purchasing the property outright.

In the future you can simply sell your share for its value at the time or alternatively you can purchase further shares in your home.

With most properties you are eventually able to own the property outright if you wish to, although there are some restrictions on rural schemes.

Who is eligible for the Help to Buy schemes?

To be eligible for Shared Ownership, Rent to Buy and Intermediate Rent schemes, you must have an annual household income of no more than £80,000. You must be unable to purchase a home suitable for your needs without assistance, and cannot be a current home owner (or be named on the deeds of another property). You must not have any outstanding credit issues (i.e. unsatisfied defaults or county court judgments).

The Help to Buy Equity Loan scheme is open to both first time buyers and existing home owners. There is no maximum household income. You can purchase a property with a maximum value of £600,000. Your Help to Buy Equity Loan home must be your main residence; you cannot use the scheme for a Buy-to-Let investment. You will need a minimum 5% deposit to qualify.

If I am a shared owner, can I buy again?

Yes, there are no restrictions which prevent existing shared owners from applying for and moving into another Shared Ownership property.

However, you must continue to meet the general eligibility criteria of earning less per household than £80,000 and be otherwise unable to afford to purchase unassisted.

Existing shared owners are also required to have disposed  of their existing shared ownership home at the point of purchase.

Does Shared Ownership mean I have to live in the property with someone else?

No, it just means that your Housing Association has ownership of the remaining percentage that you have not purchased, and you will pay them a monthly subsidised “rent” for this.

Can I buy additional shares in the future?

If you purchase a Shared Ownership property, you can increase your share at a later stage if you choose to. This is known as “staircasing”.

With most properties you are eventually able to own the property outright if you wish to, although there are some staircasing restrictions on rural schemes. Please speak to the relevant provider for more information.

If you purchase under the Help to Buy Equity Loan scheme, you can redeem part, or all, of your 20% loan at a later stage. The Equity Loan must be redeemed in full by the point that your mortgage term ends.

What happens if I want to sell my property in the future?

If you purchased a Shared Ownership property, you simply need to contact the Housing Association or Registered Provider that dealt with the original purchase.

The Housing Association or Registered Provider will advertise your property on the Help to Buy website for a defined nomination period. This period will vary.

After the defined nomination period has expired, you will be able to simultaneously advertise your property on the open market with an estate agent.

If you purchased a home using the Help to Buy Equity Loan, you can get advice about selling and redeeming your equity loan at MyFirstHome (previously known as Housing Options Plus). 

Can I rent out my property?

No, Help to Buy is designed to assist you to move on to, or up, the property ladder.

You must live in the home that you purchase or rent through Shared Ownership, Rent to Buy or Intermediate Rent schemes. You cannot use the scheme for a Buy-to-Let investment.

Subletting of Shared Ownership homes is not permitted unless you have purchased all of the remaining shares and you own the property outright.

What percentage can I purchase in a Shared Ownership property?

Your Housing Association or Registered Provider will assess your application and offer you an initial share that is deemed affordable in relation to your income, and in line with Government set affordability guidelines. This will be between 25% - 75% of the full purchase price. You will be expected to maximise the share you purchase in line with your affordability.

You pay a subsidised rent on the remaining share that the Housing Association or Registered Provider still own. In the future you can simply sell your share for its value at the time or alternatively you can purchase further shares in your home.

With most Shared Ownership properties you are eventually able to own the property 100% outright if you wish to, although there are some restrictions on rural schemes.

However, through OPSO (Older Persons Shared Ownership) the maximum share you can buy is 75%.

 



Our Office address is YA Property, 4a Mansion House Street, Newbury, RG14 5ES