Shared ownership schemes are for young and old

The shared ownership scheme isn't well known but it could help you buy a home in a good location. Sharon Dale reports

A recent report from the Resolution Foundation revealed that a third of millennials, those now aged between 22 and 37, may never own their own home and face renting until retirement. It also shows that the number of families renting has doubled over the last 15 years. Then there are those who are thrown off the property ladder, often due to divorce.

The Government's Help-to-Buy shared ownership scheme could be a solution but awareness of it is poor, say Plumlife Homes, part of the Great Places Housing Group, which specialises in affordable homes. “In some areas, it's clear that people just aren't aware of it or don't think they would be eligible,” says Alex Sanderson, sales manager at Plumlife.

Sign up to our daily newsletter

The i newsletter cut through the noise

The eligibility criteria that total household income should not exceed £80,000 a year if you live outside London, or £90,000 if you live in London, leaves the shared ownership door open to many. It can be used by first-time buyers or a previous homeowner who cannot afford to buy now.

The Shared Ownership scheme allows the buyer to purchase a share of the home, usually between 25 and 75 per cent, via savings or a mortgage. A small rent is payable on the remaining part. You can buy extra shares, if and when you choose, until you own the whole property. This is known as staircasing. If you own the property outright you can sell on the open market but if you still own a share then you sell via the housing association.

Those aged 55 or over can get help from the Older People's Shared Ownership scheme. It works in the same way as the general Shared Ownership scheme but you can only buy up to 75 per cent of your home. Once you own 75 per cent, you won't have to pay rent on the remaining share.

“It's surprising how many shared ownership homes we sell to retired couples and those who have been through a relationship breakdown,” says Alex Sanderson.

Plumlife has some newly-built shared ownership properties at Eclipse in Manor, Sheffield. They are part of Sheffield Housing Company's initiative to develop over 2,000 properties on 19 sites across the city for rent, shared ownership and sale. The company is a partnership comprising the city council, developer Keepmoat and Great Places Housing Group.

There are two house types, the two-bedroom Barlow and the three-bedroom Bradfield. Prices start at £43,575 for a 35 per cent share of a two-bedroom home. A five per cent deposit of £2,179 is needed and after that the mortgage would be about £247 per month and the rent would be £186.

Elsewhere, shared ownership properties are often a small part of a scheme where the builder has agreed to create a quota of affordable homes to fulfil a planning requirement. This means they can be found on some very desirable developments in prime locations but are administered by housing associations.

At the moment, there is a two-bedroom apartment in Candle House in Leeds City Centre. The distinctive round building sits in the heart of the Granary Wharf waterside development.

Buying a 50 per cent share in the flat via Rosa Homes, www.rosahomes.co.uk, a government Help to Buy agent, costs £107,500, but shares are available from 25 per cent to 75 per cent. The rent on the remaining 50 per cent is £440 a month, which includes the service charge.

Over in Wetherby on a David Wilson development, plot 83, a three-bedroom semi-detached house on Sandbeck Way, is available through Space Property for £87,500 for a 30 per cent share with £372.40 per month rent, www.spaceproperty.co.uk

Kelly Morris, 33, bought a 50 per cent share of a four-bedroom home on a Redrow development through Plumlife. “Myself and my partner, Michael, had been renting the whole time we had been together. We have two children, so saving up for a large deposit is really hard to do when you're paying rent and supporting a family. Affordability of the deposit was the biggest thing against us,” she says.

She was assessed for eligibility and managed to buy a 50 per cent share of a four-bedroom semi for £108,000 with a 10 per cent deposit. “It has been brilliant. Our plan is to look at staircasing when we can, with a view to buying the full 100 per cent.”

Mary Woodman, 60, a company secretary for a construction company, bought a two-bedroom home with a garden from Plumlife via shared ownership.

She says: “I'd always been a homeowner but after my husband, Steve, passed away several years ago, I lost my home and found myself in the position of having to start again.” She had a 15 per cent deposit of £8,500 and used Metro Finance to find her a mortgage for a 30 per cent share of a two-bedroom home.

*You can look for shared ownership properties in your search on portals including Rightmove. For details on the Eclipse development, Sheffield, contact the Plumlife sales team on 0161 447 5050, www.plumlife.co.uk