With more than 50 years’ experience of building high-quality homes in attractive Communities across the country, Places for People are experts at supporting Customers along their home buying journey. When you buy new from us, our friendly team will walk you through the entire process, step by step.
If you’re thinking about buying a new home through Shared Ownership, we will be there to answer all your queries and make sure the process goes smoothly. In the meantime, it’s a good idea to familiarise yourself with the following Shared Ownership home buying jargon.
Shared Ownership
The obvious place to start is with the term Shared Ownership itself! Through the scheme, you buy an affordable percentage share of your new home (usually between 25% and 75%) and pay a 2.75% annual rent on the remaining share. Your deposit and monthly repayments are generally lower than if you were to buy the same property outright, so for many people purchasing a Shared Ownership home is a quicker way to secure a place of their own.
Deposit
A deposit is the amount in cash that you pay upfront when buying your new home, typically between 5% and 20% of the property purchase price.
With Shared Ownership however, your deposit starts from just 5% of the share you buy – not the full purchase price of the property – so it’s smaller and easier to save up.
If you’re thinking about buying a Shared Ownership home, Places for People’s Shared Ownership calculator can give you an indication of the deposit amount you would need.
Agreement in Principle (AIP)
Also known as a ‘Decision in Principle’ or a ‘Mortgage in Principle’, an Agreement in Principle is confirmation from a mortgage lender that they agree to lend you a certain amount of mortgage money. It’s the first step in the mortgage application process, and one you should take sooner rather than later if you’re serious about buying a Shared Ownership home, since some housing associations require you to have this before you can proceed with your purchase.
Why not read more about How to get a mortgage for Shared Ownership?
Leasehold
All Shared Ownership homes are sold as leasehold. This means that if you buy a Shared Ownership property, you will have the right to live there for a set number of years, but the land your home is built on belongs to the freeholder, namely the developer or housing association.
However, if you are able to and you decide to increase your share all the way up to 100%, you may be able to buy the freehold of your home.
Independent Financial Advisor (IFA)
An Independent Financial Adviser (IFA) provides specialist advice on how to manage your money. With access to a wide variety of lenders along with exclusive deals, they will research the marketplace and recommend the most appropriate mortgage products based on your individual needs.
If you decide to buy a Shared Ownership home with Places for People, we can put you in touch with one of our experienced Shared Ownership specialists to help you find the best mortgages.
Service Charge
When you purchase a Shared Ownership property, you will need to pay an annual service charge, which goes towards managing and maintaining the area where you live.
Conveyancing
Conveyancing is all the legal work that needs to be done when buying your new home. You will pay a conveyancing solicitor to do this on your behalf.
This process involves legally transferring ownership of your Shared Ownership property and running checks not just on the property purchase but also on the lease covering the share you will be renting.
Places for People’s Shared Ownership Conveyancing Guide breaks down the conveyancing process for you in six easy steps.
Staircasing
A process known as ‘staircasing’ gives you the flexibility to purchase more shares in your home as and when finances allow. Owning a bigger share of your home means not only do you pay less rent but as your home increases in value, the value of your share will too.
Depending on the development you live at, you may be able to staircase the property all the way up to 100%, enabling you to own your home and stop paying rent.
Start your home buying journey
Now that you have gained an understanding of the key house buying terminology for Shared Ownership, why not start the journey towards securing the brand-new home of your dreams? Explore Places for People’s new homes