Eligibility for Shared Ownership Property
Eligibility of purchasers for shared ownership varies depending on the scheme that you are considering. As a general rule, in order to make the most of housing association shared ownership schemes, it is normally necessary to prove that you would, otherwise, be unable to afford to purchase a property. For commercial companies, the opposite is normally true and as a potential purchaser you will have to prove that you have sufficient finance available to afford both the mortgage and the rent.
Housing Association Shared Ownership
Eligibility for shared ownership with regard to housing associations is normally dependent on two factors: the prospective purchaser’s type of employment and their income level.
Where shared ownership based on employment is concerned, this is normally referred to as a key worker scheme and requires the individual to be employed in sectors such as health work, teaching, police or other emergency services. To be eligible for key worker shared ownership, it will be necessary for the potential purchaser to prove their employment status; it is also common for the purchaser to have worked as a key worker, for a qualifying period of time.
Eligibility based on income varies depending on the local council area in which the person is resident. Some authorities will stipulate both a minimum and a maximum income. Maximum incomes are normally in the region of £25,000 to £30,000, with councils occasionally stating a minimum of around £15,000 to £20,000. Certain local councils also require the purchaser to prove that they have sufficient levels of savings to deal with the one-off costs involved, such as legal fees and surveys, normally in the region of £2,000. Those with rent arrears or bankruptcy proceedings may also find that they are ineligible for shared ownership.
Shared Ownership Eligibility with Commercial Companies
The process is slightly different when purchasing a shared ownership property through a commercial company. These vendors will normally be more focused on ensuring that the purchaser has sufficient funding to pay the mortgage and the rent. When it comes to this type of calculation, the company will normally use the total monthly payments (i.e. the rent and the mortgage) as a way of assessing the affordability and not simply the mortgage payments. As a general rule, those with an income of less than £20,000 may struggle to obtain a shared ownership property, although this varies depending on the type of property and the location.
Eligibility for shared ownership varies depending on the provider;
housing associations will normally require the potential purchaser to be a local inhabitant who has insufficient income to be able to afford housing otherwise;
commercial companies are generally less stringent, although purchasers will normally have to prove that they can afford both the rental and mortgage payments, not just the mortgage payments, alone.