Shared ownership is designed to help people who want to buy a home but cannot afford to buy outright. It allows you to buy a share of a home (normally between 25% and 75%) whilst paying rent on the remaining share that Red Kite still own.
Although most schemes in time allow you to purchase up to 100% of ownership, for some schemes you may only be able to purchase up to 80%.
Purchasing a shared ownership home means you become a leaseholder, and you should obtain advice on this before you proceed with the purchase.
Who is eligible for shared ownership?
Your eligibility for shared ownership will be assessed by your local Help to Buy Agent and Red Kite. Your household income must be less than £80,000 and you must be unable to purchase a suitable home to meet your housing needs on the open market. You will need to buy the maximum share you can afford.
You will need to register with your local Help to Buy agent, who will give you a reference number which we will need at the application stage. The Help to Buy agent for the South is Radian - telephone 0800 456 1188.
How do you assess my application?
All applicants are prioritised using a scoring system, where points are awarded for different criteria. We look at a variety of factors to assess people’s suitability, including whether they:
- are serving military personnel, or former members of the British Armed Forces discharged in the last two years
- are first-time buyers
- meet specific criteria as required by the local authority planning conditions for the development
- have children at the school most local to the development
- meet the local authority’s bedroom size criteria
- are applying to buying the largest share
If all these criteria are equal, then we’ll allocate the home to the applicant who paid the reservation fee first.
How much rent will I pay?
Rent is normally charged at 2.75% of the unsold equity, but this may vary depending on the scheme.
An example of charges
The home you wish to buy is valued at £400,000. You can afford to buy 25%, and rent is charged at 2.75% on the remaining 75% that you do not own. Your monthly rent will be £687.50.
|Value of share||Rent at 2.75% per year||Rent per month|
|Property value 100%||£400,000||£11,000||£916.67|
If you are buying a house you will pay estate charges, which may include buildings insurance, grounds maintenance, and/or an administration fee. Even if you increase your share in the home to 100% by staircasing some estate charges may still apply (and you will need to arrange and pay for your own buildings insurance).
If you are buying a flat then you are likely to have service charges to pay, these may include buildings insurance, grounds maintenance, communal electricity, communal cleaning and/or an administration fee. Even if you increase your share in the home to 100% by staircasing these charges will still apply.
You may wish to obtain advice about owning a leasehold property from your solicitor, or the Leasehold Advisory Service who give independent advice to leaseholders.
Ongoing cost of home ownership
You will need to pay mortgage, rent, service or estate charges, council tax, water rates, repairs (for flats you will be responsible for internal repairs yourself, block charges will be paid by Red Kite and you will be re-charged for these. For houses you will need to pay for all repairs, even if you own a percentage of the home.) Other charges may apply.
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