The shared ownership scheme is a popular option for first-time buyers and home movers in Birmingham who want to get on the property ladder without buying the whole property outright.
With shared ownership in Birmingham, you can buy a share of a home – usually between 25% and 75%, but sometimes as low as 10%. You’ll then pay rent on the remaining share.
The rent goes to whoever owns the rest of the property, whether a housing association or a builder. You’ll often have the chance to buy more shares over time, a process known as staircasing, which can eventually lead to owning the property outright.
It’s entirely up to you whether or not you choose to staircase, but it’s worth keeping in mind that this could affect your mortgage based on market conditions and the value of your home.
If you’re considering this, a mortgage advisor in Birmingham can walk you through the details and how a further advance might play a role.
If you’re thinking about a shared ownership mortgage in Birmingham, there are some important criteria to be aware of.
Firstly, you must be over 18. Your household income needs to be under £80,000, and you shouldn’t be able to afford the full deposit or mortgage payments on the entire property price.
While you’ll need at least a 5% deposit for the share you’re buying, this should not be confused with affording 5% of the total property value as this is unnecessary.
Eligibility also extends to specific groups, including first-time buyers in Birmingham, former homeowners who can’t afford to buy again, those forming a new household, existing shared ownership property owners looking to move, or current homeowners who can’t afford a new home that meets their needs.
When you seek mortgage advice in Birmingham, your advisor will discuss these points to ensure shared ownership is the right fit for you, or suggest an alternative scheme that might be more suitable.
For existing homeowners in Birmingham, you’ll need a ‘sold subject to contract’ (STC) status, meaning you have a formally accepted offer on your current home, as well as a ‘memorandum of sale’ that outlines the sale details.
The sale of your current property must be completed before you can finalise your shared ownership purchase in Birmingham.
Shared ownership can also be an option for those over 55, with various mortgages available for over-50s that many might not realise they qualify for.
It can also meet long-term disability needs, such as requiring a ground-floor home. Moreover, if you’re an active or former member of the armed forces, you may receive priority access to shared ownership properties in Birmingham.
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The exact share you can purchase will depend on your affordability and the terms set by the housing association or builder in Birmingham. Typically, you can start with buying between 25% and 75% of the property, though in some cases it could be as low as 10%.
You’ll need a deposit of 5% of your share, so, if the property is worth £100,000 and you buy a 50% share, your deposit would be 5% of £50,000, totalling £2,500.
Your agreement should include the option to buy more shares later; if it doesn’t, a shared ownership mortgage might be more complex, but your mortgage advisor in Birmingham can explore your options with you.
Despite the name, shared ownership in Birmingham doesn’t mean you’re sharing the property with another person – it’s about sharing ownership with a housing association or builder.
This is because you’ll only have a mortgage on part of the property, while the other party retains ownership of the rest.
Of course, you can take out a joint shared ownership mortgage in Birmingham with a partner or friend, as there are no restrictions on having a joint mortgage.
If you decide to sell your shared ownership property in Birmingham, the process can be slightly more involved. Generally, you need to own 100% of the property to sell it outright.
If not, you must inform your housing association or builder, who will have the right of first refusal. They can choose to buy your share back or find another shared ownership buyer. If they don’t act within a certain timeframe, you can then list your property on the open market.
The type of lease you have may impact your ability to sell. For properties with a “designated protected area – mandatory buyback” lease, your landlord (the housing association or builder) must repurchase the property or find another buyer.
Typically, selling involves getting a property valuation, an Energy Performance Certificate (EPC), property photos, and then finding a buyer before completing the sale.
In addition to your mortgage payments on the share you own and rent on the remaining part, shared ownership in Birmingham might involve other costs, such as service charges, maintenance fees, and possibly ground rent.
These costs are often annual and can vary based on factors like cleaning, general upkeep, or landscaping. Your housing association can provide audited accounts detailing any changes in these costs.
Besides these, you’ll also need to budget for regular expenses like utility bills, contents insurance, and council tax. Solicitor fees may also be part of the process, and your mortgage advisor in Birmingham can help you understand these costs.
For more information about Stamp Duty Land Tax as a first-time buyer in Birmingham under shared ownership, you should either speak to a tax advisor or visit the Share to Buy website for more information.
As a shared ownership property owner in Birmingham, you might be interested in making home improvements. Significant changes usually require permission from your landlord, similar to renting.
Improvements can increase your property’s value, which could affect your mortgage if you decide to buy more shares later. Your mortgage advisor in Birmingham can provide more details during your free appointment, as this can become complex.
If you’re struggling to keep up with payments on your shared ownership property in Birmingham, whether it’s your mortgage, rent, or service charges, it’s essential to contact your mortgage lender and landlord as soon as possible.
Both parties prefer finding a solution, such as a payment plan, rather than resorting to repossession, which is costly for them and stressful for you.
Yes, you can remortgage your shared ownership property in Birmingham. This could help you secure a better interest rate on the share you own, purchase additional shares, or even release equity.
Given the complexities, it’s highly recommended to speak with a mortgage broker in Birmingham who can guide you through the remortgaging process.
Maintenance and repairs are typically your responsibility as a shared ownership property owner in Birmingham. That said, you may contribute to the upkeep of communal areas through your service charges. These costs can fluctuate annually based on the work carried out by your landlord.
You generally have the right to extend the lease on your shared ownership property in Birmingham. The cost of extending can vary, and it’s often more economical to do so before your lease drops below 80 years.
Obtaining a shared ownership mortgage in Birmingham with bad credit can be more challenging but not impossible.
You might need a larger deposit or face higher interest rates. If affordability is an issue, consider buying a smaller share or using a gifted deposit to boost your funds.
Your mortgage advisor in Birmingham will assess your financial situation and guide you through your options, helping to identify the best mortgage products available for you.
Your mortgage advisor in Birmingham will evaluate your income and expenditure to determine your eligibility for shared ownership, as well as assess your mortgage affordability.
Our team will review a variety of mortgage products to identify the most suitable option for you.
Once your purchase offer is accepted, we will submit your complete mortgage application and supporting documents to the lender.
Our service extends beyond simply securing the best mortgage deal for you. We also offer recommendations for insurance policies that will protect you and your loved ones.
For those exploring Shared Ownership as a route to homeownership in Birmingham, our mortgage advisors have the experience and expertise to help both home buyers and homeowners navigate their options smoothly.
We are proud to consistently provide high-quality service to all our clients, whether you’re new to us or returning. Our genuine customer reviews highlight our commitment to keeping customer satisfaction at the core of what we do.
With our booking service, you can set up appointments at times that work best for your schedule. Our mortgage advisors are available from morning until late, seven days a week, including weekends, to accommodate your needs.
We work with a wide range of high street and specialist lenders, allowing us to tailor our approach and find a mortgage deal that best matches your circumstances.
For first-time buyers and key workers like teachers and nurses in Birmingham, the First Homes scheme offers a chance to purchase newly built properties at a significant discount.
These discounts start at 30% and can go up to 50%, making homes more affordable now and in the future when they are resold.
Since availability can be limited and varies by area, exploring this option could be a great way to make your move into homeownership more achievable.
The Lifetime ISA is designed for those aged 18-39 to save for their first home or retirement, with the government adding a 25% bonus on contributions up to £4,000 each year.
This means you can receive up to £1,000 annually from the government.
The savings, including the bonus, can be used for buying a home valued up to £450,000 (as of 2024), provided your account has been open for at least 12 months.
While early withdrawals for other reasons might incur penalties, it’s a great tool to help boost your savings with extra government support.
Right to Buy in Birmingham offers tenants of councils or housing associations the opportunity to purchase their homes at a discounted price, which depends on how long you’ve been renting.
This discount can often cover most, if not all, of the deposit needed, helping long-term renters transition to homeowners.
Keep in mind that if you decide to sell within five years, you may need to repay some or all of the discount you received.
For first-time buyers in Birmingham struggling to save a deposit but able to manage monthly mortgage payments, 95% mortgages could be a viable option.
This means you only need a 5% deposit, making it easier to secure your first home.
These mortgages are part of broader efforts to support first-time buyers, helping make homeownership more accessible across Birmingham and beyond.
A joint borrower, sole proprietor mortgage allows someone else, like a family member or friend, to join you on the mortgage without being on the property deeds.
This setup can help you qualify for a larger mortgage by including the supporting borrower’s income in the affordability assessment.
Since the additional borrower isn’t on the deeds, Stamp Duty Land Tax will be calculated as though you’re a sole first-time buyer in Birmingham.
It’s a good idea to speak with a tax advisor for further details on this option.
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