News from the Finance Office

People with a low credit score find it difficult to get a mortgage to buy a property. At times, people who have a low monthly income are not given loans because lenders doubt their repayment capacity. People who intend to buy a house but are unable to get money to finance their purchase can opt for shared ownership schemes. These schemes are usually available to first time buyers of property. When you buy a property in this scheme, a part of the property is owned by a housing association, and the other parted is owned by you. The proportion of your share will depend on the payment that you make. Usually your share could be anywhere between 20 to 80 per cent of the property.

When buying the property you will have to pay legal expenses, survey expenses and all other charges that are required to complete your purchase. If you have taken a loan to pay your share, then make sure you repay your dues on time. You will also pay rent to housing association for their share of property. Usually housing association will require you to pay nominal rent for their portion of property. However, the association has a right to increase the rent on their share of property. So make sure you have make provision for changes in rent.

If you have the finances you can increase the share in the property to 100 per cent. However, the increase in the share is usually gradual and will depend on the agreement that you have with the association. The price that you pay to get the share will depend on the market price of the property. If the market price of the property rises, you will have to pay a higher amount. Even though you pay rent on the share of the property owned by the association, you will responsible for carrying out repairs. The association may also place restrictions on the alterations that you can carry out. It is in your interest to get the permission of the association before you make changes in your house.

Shared ownership schemes are usually available for people who are social housing tenants and key workers. Examples of key workers include nurses, teachers and doctors. People who think they fall into the category of key workers can apply to the local authorities to check if they run this scheme in the area that you live. If the local authorities run such schemes, you have to fill in an application and wait for their approval. There are many people who apply to the local authorities to get a house under this scheme. It is in your interests to apply as early as possible to obtain a house in this scheme. Some areas may be in demand and the waiting period will be long for such areas.

Therefore it is important that you find out the waiting period before you submit your application. Once your application has been approved you can start looking for a house that meets your requirements. The house that you are looking for must be owned by the housing association.

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Looking for a new home? Find affordable housing in the UK with SmartShare, the shared ownership and rent to buy specialists.

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