As affordable property experts, we are often asked how do you buy a shared ownership property? Is similar to buying a standard home. The answer to this is yes, and no. However, we realise that this answer doesn’t really help you. So, we have put a blog together to help explain the process to buy a shared ownership house in ten steps and answer your questions more fully.
1. Search for shared ownership properties
So, you have done your research and decided that shared ownership property is the best way for you to buy your first home. Now you can start your search for shared ownership properties in your area. It is important to note that you can either apply for new build shared ownership properties or a resale property. Resale shared ownership is when the current property owners are looking to move on.
Remember, shared ownership is a part buy, part rent scheme. So make sure you understand your financial commitments to pay a mortgage, the rent and other bills including utilities, council tax and general living expenses.
2. Check the eligibility status of the shared ownership properties on offer
Once you have an idea of the properties you are interested in, you can proceed to check your eligibility for any shared ownership properties in your area. It is likely that the housing association may have certain criteria to ensure that those buying the property are eligible to enter the scheme. For example, some housing associations will only offer homes to buyers who are connected to the local area. In addition, you may need to be accepted on to their own list before you can apply for their homes.
Each housing association will have their own policies and procedures. Some may ask that you join a list for shared ownership property and some may not. If it is not clear on the advert, get in touch with the housing association to find out more.
3. Speak to an Independent Financial Adviser (IFA)
If you meet the eligibility criteria the housing association will put you in touch with an Independent Financial Adviser (IFA) who will be able to confirm the maximum share of the property you are able to purchase.
4. Applying for a shared ownership property
When you have made sure you are eligible and pass the relevant affordability checks, you can apply for a shared ownership property. There may be different processes in place for each housing association, so do get in touch to find out how long the process could take so you have a good idea of what is involved.
5. Viewing a shared ownership property
This is the fun part! Viewing a property helps you to get a feel for what your new home could be like as well as the surrounding area. If you aren’t sure after the first viewing, take another look. By all means, explore the neighbourhood and see if you can find people to speak to about the local area.
6. Submit an application for a shared ownership property
So you’ve found a property you love? Great! The next step is to submit an application. If the offer is accepted you may need to pay a reservation fee. This will depend on whether the property is a new build shared ownership or resale property. Again it is important to find out how the housing association works and potential fees involved.
7. Once an offer is accepted appoint shared ownership solicitors and submit your mortgage application
Once you have had an offer accepted from the housing association for the shared ownership property, you will need to instruct shared ownership solicitors who will help with the process of buying your shared ownership home.
You will also need to submit a mortgage application. Some high street banks are now offering shared ownership mortgages but you may need to do an online search to find a specialist mortgage provider. It is also worth comparing the interest rates of the various lenders to ensure you are getting the best deal.
8. Arrange your shared ownership valuation
A shared ownership property valuation will need to be completed. It is likely the surveyor you appoint will be in conjunction with your mortgage company. They will send a building surveyor to the property to make sure it is worth the value you have offered. If it is not you may be able to further negotiate on the price you are offering for your shared ownership home.
9. Agree to sign contracts for your shared ownership property and set a completion date
Once local searches have been done and your mortgage company is happy with the valuation, then the next step is to sign the contracts. This effectively ties you into buying your home and sets what is known as the completion date. The completion date is the day when documents are completed, monies are transferred and you can pick up the keys to your new part buy part rent home.
10. Completion day for your shared ownership home
In order to be organised for moving day, it is helpful to research removals quotes. Once completion day is here and the legalities have been finalised you will be able to pick up your keys and move into your new home!
The above steps are generally the experience of most people when buying their shared ownership property. However, as with any property purchase, there can be problems along the way. For example, your mortgage can be rejected as a result of the property valuation or the seller can pull out. It is always good to bear that in mind along the way and to keep in contact with the housing association, mortgage provider and solicitors acting on your behalf. Hopefully, for you, the process will be straightforward and you will be in your new home before you know it!