How Shared Ownership Works

Shared Ownership, formerly known as New Build Homebuy, is a part buy, part rent Government backed scheme aimed at helping first time buyers and other eligible buyers to purchase a home. You buy a share in a home, normally a minimum of 35%, and pay rent for the remaining share to Plumlife.

Who is it for? New Build HomeBuy is aimed at helping people who want to become homeowners but cannot afford to buy on the open market in their local community, as it easier to obtain a mortgage on 35% of the value of the property than the full 100%. Am I eligible? Potential purchasers must complete an application form. In deciding whether you are eligible, Plumlife will consider the following factors:  Are you a first time buyer?  Do you own another property?  Is your household income less than £60,000?  Are you a local authority or housing association tenant or on a waiting list?  Are your existing housing circumstances unsuitable?  Have you recently moved to the area to take up employment?  Are you in the need of a new home following a relationship breakdown?  Are you able to afford the costs of a shared ownership home but unable to buy on the open market?

Each individual development has an allocation policy which means that you often have to have links to the area that the development is located in. This normally means that you have to either currently live, work or have close family in that area.

How much will it cost at the start? You will need to be able to pay the cost of the reservation fee, mortgage valuation or survey, legal fees and stamp duty. The minimum savings you need depend on the scheme you want to buy into. You may also need to pay the cost of moving home and connection charges for gas, electricity and telephone supplies. In most cases, buying a home involves paying a deposit. Can I make a lower price offer for the property? No – all of our properties are valued regularly and reflect a true market price and are not negotiable. Can I have the £500 reservation fee back if I change my mind? No – The reservation fee is non refundable.

Do I have to use a mortgage advisor recommended by Plumlife? We don’t have our own mortgage advisors but we do have a panel of approved independent advisors. We do insist that you speak to one of them – just because they are specialists in New Build Homebuy Mortgages which are generally more complicated than other mortgages. They will also run an affordability report which will help both you and Plumlife find out which percentage of the property you can afford to buy. However, you can use your own advisor once you have spoken to one of ours. How long until I get the keys? Once we have confirmed your eligibility and you have reserved the property you will need to instruct solicitors and provide us with their details. They will receive an information pack from Plumlife’s solicitors which will include key documents such as the lease, contract and service charge details. Your solicitors will check through the documents and may raise queries as well as undertaking required searches. Once this process has been dealt with they will arrange exchange of contracts and fix a completion date. The process from reservation to completion can typically take 4-6 weeks’.

What will I be responsible for? Your responsibilities as a shared owner are very similar to those of any homeowner. 1. You will own a share of your home normally on a 125 year shared ownership lease. The lease sets out both yours and Plumlife’s responsibilities and is a legally binding document. . 2. You will normally borrow the cost of your share from a bank or building society in the form of a mortgage and you are responsible for the repayments. We will accept a 100% loan-to-value mortgage. We cannot accept any mortgage with an interest rate of more than 4% above the Bank of England’s Base Rate. 3. You will have to pay the full costs associated with buying your share. Costs to consider include valuation and mortgage fees, legal costs, search and Land Registry fees. 4. You will be responsible for the ongoing running costs of your home which will include: Mortgage repayments; rent (reviewed each year); service charges (where applicable); and your own bills (gas, electricity, telephone, council tax, contents insurance etc.).If you have bought a house, you will be responsible for all the repairs, maintenance and replacement of all aspects of your home. If you have bought a share in a flat, you will be responsible for all internal repairs and maintenance but Plumlife or your landlord will be responsible for arranging repairs and maintenance in the communal areas. You will make a contribution of costs towards the upkeep of the communal areas through your service charge.

Will I have to insure the building? No. Plumlife provides buildings insurance which is included in your rent (or in your service charge). You should let your mortgage company know that you have cover and we can let you have a letter confirming this if they require it. You will need to buy your own contents insurance but Plumlife has links to an affordable Contents Insurance policy and we can let you have details of this on request.

Can I buy further shares in the future?

After your initial purchase, you can buy further shares in your home and eventually own your home outright subject to individual leases. This is called "staircasing". The extra share you buy could be 10%, 20% or 30% The amount you pay for additional shares will be based on the value of your home at the time you staircase. When you buy more shares your rent will reduce, and if you buy outright you will no longer be required to pay rent. However you will still be required to pay service charges if applicable. What if I want to sell in the future?

If you own your home outright (100% ownership) you can sell it on the open market (e.g. through an estate agent). If you are a shared owner and want to sell the share that you own, you must first notify Plumlife as we may have a waiting list of eligible people. This would need to be at the market value at that time, as assessed by an independent valuer (whose fee you would need to pay). We would also need to approve the valuation before you could market the property for sale. If we have no suitable buyers, you would then be able to sell your share on the open market. The sale proceeds will be split according to the percentage shares held between you and Plumlife. Can I make Improvements or alterations to my home? You must ask Plumlife for permission to make any structural changes. All reasonable requests will normally be agreed however you may need to pay for our surveyors to carry out an inspection prior to consent being given. Can I keep pets in my home? Pets are not normally allowed in flats but may be allowed in houses where there is a private garden area. Please check the individual lease for clarification. Can I take out additional loans secured on my property? If you need to borrow money and would like to use your home as security, you will need to get Plumlife’s permission. The loan can be secured on the property but Plumlife will not postpone its interest in favour of another loan. This means that if you sold your property, your mortgage would be paid first, our loan second and any further borrowings next.

Please note: This information is given as a guide only and is subject to the terms and conditions of the lease of the property for sale. All prospective buyers are advised to take independent legal advice before going ahead with the completion.