Shared ownership is nothing new but it is becoming more popular as house prices continue to grow out of the reach of even well paid individuals - especially in pockets of the UK and London and the South East of England.

The Government have fairly recently got involved in the process too and they now offer a scheme to help people buy their new home. But before we go into the detail, it’s worth understanding just how you share ownership of a property.

There are several ways by which more than one party might own an interest in a property (for example, as a leaseholder or the lender of money secured on the property - a mortgagee) but in law the two primary ways to own a freehold interest are as tenants in common or as joint tenants.

Joint tenants
As joint tenants (sometimes called ‘beneficial joint tenants’) you have equal rights to the whole property. The property automatically goes to the other owners if you die and you can’t pass on your ownership of the property in your will

Tenants in common
As tenants in common, you can own different shares of the property, the property doesn’t automatically go to the other owners if you die and you can pass on your share of the property in your will.

The Government’s Shared Ownership Scheme

Shared Ownership schemes usually involve an arrangement of tenants in common, meaning that the share of ownership can be specifically determined at the outset and the shared interest of each party can be sold or left in a will as part of one’s estate upon death.

The Shared Ownership Scheme introduced by the UK Government in England (Scotland and Wales have their own schemes) is called “Help to Buy Shared Ownership” was created to help both first time buyers and former homeowners to get back onto the housing ladder and is available to help to buy a newly built home or an existing one through resale programmes from housing associations.

The scheme works on the basis that rather than having to put together a deposit and mortgage to purchase the whole of the property, a buyer can now purchase part of the property with the other 25 - 75% of the home being owned by a third party under the terms of this scheme. The homeowner then pays the mortgage every month in the usual way and in addition, pays a rental payment for the remaining share not owned by them.

The scheme is open to buyers that do not currently own a home (or are existing shared-ownership’ homeowners looking to move, as long as their household income is £80,000 or less outside London (£90,000 inside London).

If you are over 55 ask us about the Older People’s Shared Ownership Scheme which offers a rent free option on the share of the home you don’t own (up to a maximum of 25% of the home).

Only members of the armed forces enjoy special priority rights when applying for Government-sponsored shared ownership schemes but local authorities may offer priority rights to other groups.

Mortgage Required are authorised Help to Buy Agents and can advise you on how to buy your next home using a Help to Buy scheme. For more information contact us on 01628 507477.