First time buyers can purchase a share of a new build property, or resale property, from a housing association through a Shared Ownership scheme.

Buyers can typically purchase a share of the property between 25-75 percent. The buyer pays a mortgage on this share amount, and also pays rent to the housing association on the share they do not yet own.

It is possible for the homeowner to increase the share that they own in their property through purchasing more shares of the property in a process known as ‘staircasing’. Through staircasing it is possible to purchase enough shares to own the property outright.

Buying a home through a Shared Ownership scheme allows you to be able to afford to buy a property that you otherwise could not on the open market.

There are some restrictions to consider when purchasing a home through a Shared Ownership scheme, including:

• No-subletting: Shared Ownership schemes were brought in to help people, who could otherwise not afford to, get on the property ladder. It is therefore prohibited to sublet your home purchased through shared ownership.
• Permission to make property alterations: You will need to obtain the landlord’s permission if you want to make any alterations to the property.
• Age Limit: Shared Ownership schemes are only in place for home buyers aged between 18-54. The ‘Older People’s Shared Ownership’ scheme is in place to assist those aged 55+ in buying a home. This scheme does however only allows buyers to purchase up to a 75 percent share of the property. Homeowners cannot ‘staircase’ up to owning 100 percent of the property.

The Help to Buy equity loan scheme was brought in by the government as a means of allowing home buyers to purchase a new build property with only a 5 percent deposit. The government then tops up your deposit by loaning you up to 20 percent of the value of the property. The 20 percent loan is interest-free for 5 years. Homebuyers purchasing a home though the Help to Buy scheme means that you can obtain a 75 percent mortgage.

You can purchase a new build property using the Help to Buy scheme with a value of:

Up to £600,000 in England

Up to £300,000 in Wales

If you decide to use the Help to Buy scheme to purchase a property, there are some restrictions in place which may make the scheme not right for you. Terms and conditions include:

• No subletting: You cannot sublet your property until you have repaid the 20 per cent equity loan.
• Can’t own any other property: If you are a current homeowner looking to purchase using the scheme, you will be expected to sell your home before being able to complete.
• Permission to make property alterations: You will need permission to make significant property alterations.
• Loan costs: Loan amounts are not fixed and your repayments can become increasingly expensive.
• Negative Equity: It has been suggested by some property experts that the Help to Buy scheme has begun to inflate house prices. Many are worried that this is leading to a housing bubble that is likely to burst when the scheme ends, leading to many homeowners in negative equity.
• Limited amount of mortgage lenders: Only certain mortgage providers will act for buyers who choose to purchase using the scheme. This is due to the third party involvement from Home England who provide the equity loan.

There are certain eligibility requirements that buyers must meet in order to purchase a property through a shared ownership scheme, including:

• You must be a first time buyer, who either doesn’t currently own their own home, or is in the process of selling their present home.
• Your annual household income must be less than £80,000, or less than £90,000 if you live in London.
• You must be able to prove a good credit history and be able to afford the monthly mortgage/rent repayments and all other associated costs of owning a home.
• You must not be in arrears with your mortgage or rent payments.
• You wouldn’t be able to afford to purchase a home suitable to your needs on the open market.
• You must be between 18-54 years of age.

It is also the requirement to have enough money upfront to put down 5 to 10 percent of the equity share that you are buying as a deposit. For example if you are purchasing a 25 percent share of a property which is worth £50,000 you would need to be able to put down £2,500-£5,000.

If you meet the eligibility criteria you can purchase a shared ownership property by contacting Housing Associations to arrange viewings of their properties available, or through searching for property on the Share to Buy website.

First time buyers and existing home owners can purchase a new build home through the Help to Buy scheme, as long as:

• You are buying the property with the purpose of it being your only residence.
• You are not buying the property with the intention of letting it out.
• You will not own any other property after completion.
• Have a minimum 5 per cent deposit.
• You must not rent out your existing home and purchase a second home using the Help to Buy scheme.
• You cannot borrow any more than 4.5 times your annual gross income – minus any outstanding debts.
• Your monthly mortgage, equity loan interest and service charges (if applicable) cannot equate to more than 45 percent of your monthly net household income – minus any debts.

Help to Buy agents are appointed by Homes England to govern the Help to Buy: Equity Loan scheme. The Help to Buy agents give advice to home buyers and authorise the go-ahead for the equity loan scheme. You can visit the Government’s Help to Buy website to search for Help to Buy agents in your local area.