Your annual gross household income is less than £80,000, £90, 000 in London
You do not currently own a home
You have no outstanding credit problems
The monthly mortgage, rent and service charge payments on the property are less than 45% of your household income after tax

Some other restrictions may apply on certain properties such as a local residency requirement or minimum household size.

Your general eligibility can be confirmed once you have filled in the application form and you have a specific scheme in mind. You will also need to register with your local Help to Buy Agent.

We will then assess both the make-up of your household and your affordability in relation to the home you are interested in.

In terms of household make-up the general guideline is that you can apply for a home of any size. However, local conditions may apply with one more bedroom than you need for a single person or couple, and a household with at least 1 child (or another dependant) may apply for a 3 bedroom home.

Regarding affordability, we must be sure that your current income is sufficient to sustain the financial commitment involved. 

We require and will arrange for a specialist financial advisor to contact you and carry out an affordability assessment. This will help us establish the share you will be required to buy.

Leasehold ownership of a flat is simply a long tenancy, the right to occupation and use of the flat for a long period – the ‘term’ of the lease. This will usually be for 99 or 125 years and the flat can be bought and sold during that term.

The leasehold ownership of a flat usually relates to everything within the four walls of the flat, including floorboards and plaster to walls and ceiling, but does not usually include the external or structural walls.

The structure and common parts of the building and the land it stands on are usually owned by the freeholder, who is also the landlord. The freeholder is responsible for the maintenance and repair of the building. The costs for doing so are recoverable through the service charges and billed to the leaseholders.

A leasehold ownership of a house usually relates to the whole building both internal and external and possibly a garden and driveway. Typically a leaseholder of a house would be responsible for the repair and maintenance of the whole building.

The landlord can be a person or a company, including a local authority or a housing association.

In addition to the usual leasehold property there is a form of leasehold property referred to as a shared ownership lease where the leaseholder can purchase a share of a property (house or flat) and pay rent on that part of the property retained by the landlord. The leaseholder will have a right to purchase additional shares in the property until they own 100% of the equity. At this point the property is no longer a shared ownership property.

Most shared ownership leasehold properties are granted by housing associations as part of their home ownership programme. Such leases are almost always in a format approved by the Homes and Communities Agency (HCA, formerly the Housing Corporation). The intention is to provide a first step into home ownership for those who are currently renting and cannot afford to purchase a home at the full market value.

A shared ownership lease of a house does not qualify for the right to purchase the freehold ,under the provisions of the Leasehold Reform Act 1967, if there is a provision in the lease for the freehold to be transferred on the purchase by the leaseholder of the remaining share in the property (referred to as the final staircasing). Other exemptions apply if the leasehold house was provided for the elderly or within a designated area referred to as a protected area.

A shared ownership leaseholder of a flat only qualifies for the statutory right to extend their lease as the holder of a “long lease” if they have “staircased” up to 100% ownership. However, the landlord may have their own policy of allowing lease extension where there is less than 100% ownership. Leaseholders would need to check with their landlord.

As rent is paid on that part of the equity not owned by the leaseholder, a landlord can take action to repossess the property for rent arrears in the county court in the same way that a landlord of an assured shorthold tenancy can under the provisions of the Housing Act 1988. If the property is repossessed in these circumstances no compensation is payable to the leaseholder to take into account the balance, between the leaseholder’s debt and the market value of the leaseholder’s share in the property.
How much stamp duty will I need to pay?

In England and Northern Ireland, first-time buyers purchasing shared ownership properties costing up to £500,000 are now subject to the stamp duty relief available to other first time buyers. Previously, they still had to pay the tax even though all other first-time buyers were exempt on the first £300,000 on properties valued at up to £500,000 – a change which came into effect from the previous Budget last November.

Properties valued up to £300,000 are exempt from Stamp Duty Land Tax, 5% is then payable on any value above £300,000 up to and including £500,000.

This means that you will pay:

0% on the first £300,000
5% on the remainder up to £500,000

If the purchase price is more than £500,000 you can’t claim the relief and must pay the standard rates on the total purchase price.

Who is eligible for the Stamp Duty relief?

The new exemption in the Budget only applies to first time buyers.

To classify as a first-time buyer you must be purchasing your only or main residence and have never owned a freehold or have a leasehold interest in a residential property in the UK or abroad.

How does it work?

First time buyers will need to declare that they have never owned a property either in the UK or abroad. A special first time buyer code will need to be submitted with the stamp duty return once a home is purchased.

Full Stamp Duty relief is available up to £300,000, with reduced liability up to £500,000. Any purchases above £500,000 will attract the normal stamp duty rates on the whole purchase price.

Joint ownership and Stamp Duty relief

If a property is being purchased by more than one individual then all parties will need to be first time buyers to qualify for the relief.

How to pay Stamp Duty

Your solicitor will usually deal with the Stamp Duty return and any payment due for you, although you can do it yourself.

Either way, you’re responsible for making sure it’s all submitted on time.

If the price of your new home is under £125,000, you must still submit a return (unless exempt) even though you won’t need to pay any Stamp Duty.

Gross rent is the total rent payable if you are renting 100% of the property. If you are buying a proportion of the house, then the specified rent is the percentage of the gross rent that you will pay the Housing Association (for example it could be 40% or 50%)

Why does the Housing Association need to approve my mortgage?
The Housing Association needs to make sure that the mortgage allows the shared ownership scheme; it also protects the Housing Association in the event of repossession for unpaid mortgage; and it ensures the right amount is being lent. On the other side, the mortgage company need to be assured the shared ownership lease has a mortgage protection clause to protect them in the event of repossession for unpaid rent.

You may purchase further shares in the future known as stair-casing, and generally, you may stair-case until you own your home outright. An RICS valuer will need to value your property as further shares are based upon the current market value. You will incur legal and surveyor fees when stair-casing.

Some properties may have a local restriction limiting the maximum share you can own to 80%. This is to help keep properties for local people. 

Your discounted rent is due monthly and the amount depends on the share that you own. This amount will be reviewed annually. Service charges will vary between properties and will include the cost of insuring the building and may include ‘communal’ costs e.g. lift maintenance, cleaning communal areas etc. You are liable for all household bills e.g. council tax, utilities contents insurance etc. You will be responsible for your own repairs as a home owner.