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Types of purchase

Shared Ownership

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We also recommend you read the section on Homebuy when you have finished reading this, as it is a common type of shared ownership scheme.

What is shared ownership?

Essentially, you buy a share in a home, with the remainder being owned by a Registered Social Landlord (RSL), which often goes under the name of a housing association. Housing associations are funded and regulated by The Housing Corporation, which is a not-for profit government agency that is run by volunteer committees.

Will I get a mortgage?

As long as you have a reasonable credit history, you should have no problem in finding a lender that is willing to give you a mortgage for this type of scheme, If you credit history is not so good, you may have to hunt around a bit more, but you should still be able to find one (though the rate you get might not be so competitive). Try looking through the mortgages section of our SiteFinder.

What do they get out of it?

You pay the RSL rent on the portion it owns - the higher the portion you buy yourself, the lower the additional rent you have to fork out. You can increase your holding by purchasing shares from the RSL and the price you pay for these shares is determined by the value of the property at that time.

What happens when I decide to sell?

When you sell the property, the proceeds of the sale are split according to who owns what. If you started out with 60% and then bought a further 10% later on, you would get 70% of the sale proceeds, the RSL will get the other 30%.

What percentage should I buy?

Usually you can initially buy anything from 25% to 75% of the property. Take into account what your mortgage repayments will be (don't forget to make an allowance for potential rises in interest rates) and work out what the rent will be on the stake owned by the RSL.

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