You can buy a home through the shared ownership scheme if you cannot afford all of the deposit and mortgage payments for a home that meets your needs.
You buy a share of the property and pay rent to a landlord on the rest.
When you buy a home through shared ownership, you:
• buy a share between 10% and 75% of the home’s full market value
• pay rent to the landlord for the share they own
• usually pay monthly service charges, for example towards the maintenance of communal areas
The share you can buy is usually between 25% and 75%. You can buy a 10% share on some homes.
You can take out a mortgage to buy your share or pay for it with savings. You’ll also need to pay a deposit, usually between 5% and 10% of the share you’re buying.
You can buy more shares in your home in the future. This is known as ‘staircasing’. If you buy more shares, you’ll pay less rent. The amount of rent you pay will be based on the landlord’s share.
You can find more information on shared ownership on the Government’s website.
Reservation fee
This is a £250 fee you pay to reserve your home. It is non-refundable should you pull out of your purchase during the sales process, however you’ll get this back when the sale completes as it will be deducted from the monies due on completion.
Mortgage deposit
Your mortgage lender will usually require a deposit in order for you to secure a mortgage, this typically begins at 5% of the share you are purchasing but will vary from lender to lender. Your Independent financial advisor will be able to discuss the deposit requirements of different lenders with you.
Mortgage fees
Depending on which lender you choose there may be a fee as part of the mortgage application or mortgage valuation process. Your IFA or lender will be able to advise you about the fees applicable to you.
Solicitor’s fees
These vary depending on the solicitor you use and will include items such as Land Registry fees, search fees and other expenses.
Stamp Duty Land Tax (SDLT)
This is a government tax on buying a home. Your solicitor will be able to tell you if the tax applies and if it does, how much it will be.
Mortgage
Your mortgage for the share of the property that you own.
Service charge
If you purchase a property with communal areas there will usually be a service charge. Your service charge is calculated at a monthly rate and covers the cost of the upkeep of communal areas such as gardens, pathways or hallways
Management fee
The management charge is payable monthly and helps us to cover the cost of running and managing the area in which you live. Some of the services that the management fee contributes towards are:
Rent
Under the Shared Ownership scheme you pay a subsidised monthly rent on the share of the property you don’t own. The larger the share you own, the less the rent will be.
Buildings insurance
As the freeholder of your home you need to make sure that your home is adequately insured against unexpected damages
Repairs
We will arrange for any defects on new-build homes to be repaired during a set time period. After that timescale, you will be responsible for arranging and paying for all repairs to your home
Other household costs
You will need to organise payment of your own contents insurance, council tax, utility bills, TV licence and any other utilities that you require e.g. internet, telephone etc.
Check that you meet the qualifying criteria. You can view it here. You will be asked to provide evidence that you meet the criteria when you express an interest in a property.
If you are interested in a Pioneer Group owned scheme, please contact us by email at contactus@pioneergroup.org.uk confirming that you meet the qualifying criteria and to express an interest. We will need your full contact details and details of the type of property and area you are interested in. You must tell us if these change so we can contact you if we start marketing properties that meet your requirements. We often use a third party to market our available homes and we will tell you who this is when new schemes become available so you can approach them to make your application. We can only do this if you have expressed an interest to us. You may see advertisements from our partners regarding available properties and you can contact them directly. You don’t need to contact us if you are approaching them directly.
It is important to remember that expressing an interest does not give you priority. It simply means we will tell you when we may have properties becoming available that you can apply for.
Once your initial application has been registered we will also need to see the following from you to support your application:
We will then check the information on your application form to make sure that you are eligible by carrying out an affordability check to ensure that you can afford your home now and in the long term.
If you are eligible, we will then agree the percentage share that you will purchase based on your affordability check.
The next step is to appoint a solicitor to carry out all the necessary legal work. It’s best to do your research and gather some estimates in order to obtain a competitive quote. Some of the costs involved when looking into legal help are solicitors fees, land registry fees, search fees and expenses (also known as disbursements).
Once instructed, your solicitor will act on your behalf by then:
Once we have received your reservation fee and you have confirmed the solicitor that will be representing you, we will issue a ‘reservation document’ to you and all solicitors involved. This document summarises the details of your proposed purchase and will give a date by which you must exchange contracts. The date for exchange of contracts will usually be 28 days from when we offered you a property. During the sales process your solicitor will carry out searches, check over the lease and raise any questions they may have to our solicitor. The legal term for this process is ‘conveyancing’. You must also inform your mortgage lender of the details of the home you are buying. Your mortgage lender will instruct a valuer to inspect your new home to ensure that they are happy it is suitable for them to lend on. Once you receive a copy of your mortgage offer and valuation report we will need to see a copy to approve. Throughout the sales process your appointed Sales Consultant will be available to answer any questions you may have.
You are now entering the last stages of the legal process. Exchanging contracts means that the buyer and the seller are both legally committed to the sale; you are legally bound to buy the home and we are legally bound to sell to you. Both parties will then agree a ‘completion date’ – a date on which you get the keys and move into your new home. The completion date is usually within 10 working days of exchange of contracts if your home is ready to move into. If your home is still under construction we will let you know when it is ready and then arrange a completion date, this is known as ‘completion on notice’.
In readiness for completion, your mortgage lender will have transferred the mortgage monies to your solicitor. Your solicitor will then pass that money on to our solicitors, once this is received the transaction will ‘complete’ and it’s time to move into your new home! Our team will then make arrangements to meet you at your new home to give you the keys and supply you with a handover pack, which includes:
• Instructions for your new appliances such as heating, white goods, etc.
• NHBC warranty handbook or equivalent.