Published 23 December 2022 · Last reviewed 23 December 2022 · Older article — see current rates
Mortgage for Right to Shared Ownership scheme
Calling all Tenants living in social and affordable housing The Right to Shared Ownership scheme is now open.
Right to Shared Ownership has opened its door for Tenants living in social and affordable housing to purchase a share in their own Home.
To qualify, Tenants must have lived in social housing for a minimum of 3 years, in homes built through the government’s Affordable Homes Programme 2021-26, and specifically, they must have lived in the property they want a share in for at least a year.
The shares range from a minimum 10% up to 75%, with the final 25% payment to become a full owner.
The brain-child of the Right to Shared Ownership scheme is Tenants can gradually increase their stake (otherwise known as “staircasing”), and eventually work their way up to becoming a full owner of the property in manageable steps.
Application for Right to Shared Ownership scheme should be made directly to your Landlord, who will do an eligibility check.
Eligibility criteria
Tenants will be eligible for the scheme if they satisfy all the following criteria:
- live in a property where the Right to Shared Ownership applies (see section 2)
- hold an un-demoted secure tenancy, an assured tenancy, or a Localism Act fixed term tenancy (assured shorthold tenancy for a fixed term of at least 2 years)
- have lived in the current property for at least 12 months
- have been a tenant of social or affordable housing for at least 3 years (this need not have been with the same landlord or continuous)
- are not in rent arrears
- are not subject to a court order for the possession of the property
- are not subject to bankruptcy proceedings or unfulfilled credit arrangements
- are not subject to legal proceedings e.g. a notice of seeking possession has been served
- are not subject to legal proceedings on the grounds of anti-social behaviour
- satisfy all standard eligibility criteria for the Shared Ownership scheme including income requirements (currently an annual household income of £80,000 or less or £90,000 or less in London) and not already owning a property
- satisfy immigration requirements
In case of joint applications, all applicants must either be tenants or family members who have lived in the property for the 12 months prior to purchase. All applicants who joined the application must be a party to the purchase at the completion.
Pre-application
Providers will be expected to publicise the details of the scheme to ensure that all tenants in eligible properties are aware of their Right to Shared Ownership and how to apply.
Providers will need to be able to respond to any queries from tenants about whether the Right to Shared Ownership applies to their property.
Will the tenant get a discount?
No Unlike the original right to buy as well as the right to acquire scheme, there is no discount. The share will be based on a percentage of the full market value following an RICS valuation.
Affordability checks
It is highly advisable that you should seek professional advice to work out Mortgage affordability. It’s also recommended that you try to purchase the highest amount of shares initially to make the staircaseing process faster and more viable in the future.
As with all house purchases, separate legal representation is always necessary howvere Niche Advice can recommend a qualified legal firm to help you with the Right to Shared Ownership home purchase process
Niche advice are experts within the right to buy sector and has helped hundreds of clients become homeowners.
If you need to borrow to enable the share purchase, please get in touch with us by completing the below form.