Social Rent
Shared Ownership

   Shared Ownership
   Resale Properties
   New Build Properties
   Financial Advice
   Staircasing
   Application Form

Private Rent
Sheltered Housing
Developments

Council Tax Information

Housing Benefit Information

SHARED OWNERSHIP GUIDE (NEW BUILD HOMEBUY)

The Challenge...

If you want to buy a home, but don't think you can afford it, think again. With the help of shared ownership - a proven scheme that works - you may find you already have the means to buy your own home...

HOW WATERLOO CAN HELP

Many first time buyers may be reluctant to commit themselves to a purchase, despite low interest rates and competitive property prices. It is recognised that the uncertainty over job security is a major worry. Shared Ownership provides an ideal solution, because it removes the need for the commitment to a maximum mortgage, thus providing a buffer in uncertain times.

At Waterloo we have many years experience of providing homes for sale through shared ownership and have assisted hundreds of new home owners to realise their dreams. We have many new properties being built as a result of our healthy development programme in close liason with many local authorities.

HOW SHARED OWNERSHIP WORKS

Shared ownership is also known as New Build HomeBuy. It is is simply part buying and part renting a home with the help of Waterloo. The initial share (usually 40%, but dependent on affordability) is purchased by means of a mortgage from a building society in the normal way.
 

Email: sales@waterloo.org.uk

Rent is payable to Waterloo for the remaining share, and is reviewed annually in line with inflation.

At any point, shared owners can buy further shares of at least 10% until full ownership is acheived. Alternatively you can remain a shared owner indefinitely if you want to.

You do not have to share your home with anybody other than your own family/ household.

HOME OWNERSHIP QUESTIONS ANSWERED

Am I eligible?
We are required to assist local first-time buyers who could not otherwise afford to buy their own home within communities. Also we can assist job movers who are moving from a lower value area, and those who need to move because of a marriage or relationship breakdown. A number of priorities currently exist being (1) council or HA tenants (2) local people (3) general waiting list applicants by date of application.

How do I buy the initial share?
Most building societies support shared ownership, and mortgages are generally available, subject to status and valuation. Also you would be well advised to use a solicitor to safeguard your assets.

What initial costs are involved?
You should allow for the following:

• A retaining deposit of £250 which is payable to Waterloo once you have been made a formal offer.
• Legal fees which will be £500-£700 approx. and payable to your solicitor upon completion of purchase. Ask for a detailed estimate.
• A building society valuation fee of £150 approx. may also be required.
• Preferably you should also have a 5% deposit towards the share price as it is likely to be a condition of your mortgage.
• Stamp duty is payable on the share being purchased or on the full value of the home. (eg. £150,000 home bought on 40% share at £60,000 = 1% stamp duty at £600 for the 40% share or £1,500 for the full value).

What ongoing costs are there?

• Your monthly mortgage repayment.
  This may fluctuate as interest rates change.
• Rent - payable to Waterloo in advance, on the 1st of each month.
  This is revised annually in line with the Retail Price Index.
• Usual household costs such as council tax, water rates, fuel charges
• 100% repairs and maintenance costs to your house
  (For flats a separate service charge will apply for the exterior and common areas. You will still retain 100% responsibility for internal repairs).

Are there any other costs?
If you buy a flat it is likely that there will be common areas that Waterloo will maintain, such as grounds, private roads and street lighting. You will have to pay a service charge for such services.

Waterloo is required to insure the building you buy up to the full reinstatement value. You will, however, need to arrange your own contents insurance.

How do I buy further shares?
A great advantage of shared ownership is that you can acquire more shares in easy stages, and eventually own the property outright. This is at a pace that suits you, and there is no obligation to buy shares if you do not wish to do so. Buying further shares is known as 'staircasing'. The additional share bought depends on the initial share owned, but it is likely to be a minimum of 10% although you can buy higher percentage shares in blocks of 5%. The price of buying further shares is set by an independent R.I.C.S valuer on the basis of the market value at the time you choose to staircase. The staircasing transaction normally has to be completed within three months of the date of the valuation.

What if I want to sell?
There is usually a healthy demand for shared ownership properties, and Waterloo maintains a list of prospective purchasers. This ensures that someone else who cannot afford to buy outright also benefits from the shared ownership scheme.

We currently operate a successful resale service and have been able to find buyers for approx 70% of sellers. Initially shared owners are required to contact Waterloo who will arrange an independent R.I.C.S valuation which will determine the price of the share. Once this has been established the property is advertised on our website and sales details are sent to waiting list applicants. The vendor (shared owner) would agree the sale with the buyer (waiting list applicant) and solicitors would be appointed by both parties until legal completion is achieved.

If you buy the property outright (in other words, if you have staircased to 100% ownership) you can sell it on the open market.

How much do I need to be earning?
This will be dependant on the value of the property and the amount of savings you have. In many cases Waterloo assists people earning an average of £13,000 - £20,000 p.a . The minimum single income we accept is £13,000 p.a. (this figure depends on loan repayments and savings, etc)

What if I can't meet the payments?
It is important that you tell us straight away if you are unable to make payments. We will always help if possible, by arranging to reschedule payments and will advise you if Housing Benefit or any other assistance is available.
It must be stated, however, that if you constantly fail to meet your payments without having made alternative arrangements, then either the building society or Waterloo can instigate legal proceedings to take possession of your home.

What are my choices?
There are three ways that you can buy a shared ownership property with Waterloo, the choice is yours:

1. New build
   Where Waterloo builds a new property or refurbishes/ converts properties for sale.
2. Shared ownership for the elderly
   These schemes are designed for older people (usually aged 55 and over) and have 24 hour alarm system.
3. Resales -
   Where Waterloo's existing shared owners sell their percentage of the property to someone on the waiting list.

What happens next?
Should you decide that you would like to be considered for shared ownership, the first thing that you should do is complete and return an application form.
Upon receipt an assessment will then be made to determine your eligibility and a credit check may also be conducted. Applications are usually assessed and a response provided within 10 working days of receipt. If successful applicants will be added to the waiting list and receive a letter confirming their preferred areas.
Once a suitable property for which we can consider you is available, we will arrange to see you to discuss your application in detail, explain the terms and responsibilities of the shared ownership lease and answer any queries you may have.

OUTRIGHT PURCHASE COMPARED TO SHARED OWNERSHIP

Example: £100,000 house

ADDITIONAL BENEFITS OF SHARED OWNERSHIP

• Single people earning below £30,000 would not qualify to buy outright in this example, but they would qualify on shared ownership.
• Couples earning £40,000 or below would not qualify to buy outright in this example, but they would qualify on shared ownership.
• If interest rates increase, the cost gap increases and shared owners obtain greater benefit.
• A greater disposable income is available to shared owners who may otherwise over-stretch themselves in becoming outright owners.
• Flexible tenure is available to shared owners which allows Waterloo to buy shares back and reduce the possibility of shared owners losing their home through repossession.
• First time buyers, people with insufficient equity and some former owners can be assisted on shared ownership.
• Encourages investment from outside of the area as well as giving local people an opportunity to buy at an affordable level.
• Cost for shared ownership includes buildings insurance.

FOR MORE INFORMATION