Are you ready to buy?

14%

Monthly NET pay £1,994.66

Based on average UK salary

With shared ownership more and more people are discovering that they can afford to buy, and the idea of finally getting on the property ladder is very exciting – but are you ready? We asked the country’s largest resales specialist Urban Moves

55%

The first step to getting your shared ownership property is to make sure you’re eligible for the scheme.

Tick all that apply: … I don’t own another property in the UK or any other country or have agreed a sale by the time I apply and will sell the property I own on or before the completion date of the shared ownership property I wish to purchase … I have a household income that is less than £90,000 or £80,000 threshold outside the M25. (Every property will have a minimum income level too, determined by its value, rent and service charge costs.

In most cases you will need to meet or exceed the given minimum income) … I have access to a minimum deposit of 5% of the share being purchased … I am in full-time permanent employment … I am a British, EU or EEA Citizen or have indefinite leave to remain in the UK … I have a good credit history

If you ticked all the boxes then congratulations, you meet the general eligibility criteria! This is great news as it means you’re eligible for the scheme – although you may not pass affordability for every property.

Each property will have a required minimum income level which is calculated by its value, rent and service charge costs. In most cases you will need to meet the guideline minimum income to pass affordability, but don’t worry, every Urban Moves property will have this figure listed clearly on the property marketing details.

UNDERSTANDING AFFORDABILITY

Affordability is a term used to explain if your monthly income is enough to cover your potential outgoings. The monthly cost of a shared ownership property (rent, service charge and mortgage) along with any other financial commitments you may have (phone plan, car loan, pension contributions etc) must be less than 45% of your NET monthly income (after tax), see chart above.

When staff at the Presales Team at Urban Moves are assessing your application form they will enter your information into the affordability calculator to see if you are under the 45% maximum. If you’re not, they’ll look to see if there is any way you could be (ie raising your deposit or reducing a loan payment) and they’ll let you know if it’s possible. Some may think that if they were to buy a larger share the monthly cost would be cheaper because the rent would go down, but you have to consider that the mortgage costs will increase unless your deposit is increased to cover the additional shares purchased – this is very rarely the case as you can see in the table below.

20%

6%

6%

• Mortgage • Rent • Service Charge • Monthly payments (loan, pension etc) • Remainder

TOO AFFORDABLE?

In some cases, a property is too affordable for an applicant, this is when the monthly cost of rent, service charge and mortgage along with any other financial commitments would be under 25% of their NET monthly income, which is deemed the minimum monthly household payment to net income

AFFORDABILITY A AFFORDABILITY B AFFORDABILITY C

Full Market Value £200,000 25% Share £50,000 Full Market Value £200,000 50% Share £100,000

Full Market Value £200,000 75% Share £150,000 Deposit required (10%) £5,000 Deposit required (10%) £10,000 Deposit required (10%) £15,000 Rent on unsold Equity (2.77%) = £346.25 PCM Rent on unsold Equity (2.77%) = £230.83 PCM Rent on unsold Equity (2.77%) = £115.42 PCM Service Charge £100 PCM Service Charge £100 PCM Service Charge £100 PCM Mortgage £238* PCM Mortgage £475* PCM Mortgage £713* PCM Monthly Total: £683.78 Monthly Total: £805.89 Monthly Total: £928.00 Guideline Minimum Income: £21,600 Guideline Minimum Income: £26,400 Guideline Minimum Income: £31,200

DEPOSIT £29,750 £29,750 FMV £850,000 DEPOSIT £17,250 £17,250 FMV £230,000

ELGIN GARDENS

Guildford, Surrey GU1 1UB

This fi rst fl oor, two bedroom fl at is spacious, well presented and in a recently constructed building surrounded by greenery. The property features a reception room with a south/south west-facing balcony and sleek, open-plan kitchen. The bedrooms are similar sized doubles with Juliet balconies and there is a large storage cupboard in the entrance hallway. The energy effi ciency rating is very good, thanks to modern insulation standards, double glazing and gas central heating. A parking space is included in the sale, plus London Road station is only a short walk or even shorter bus ride away. The wideopen spaces of Stoke Park are also nearby and Guildford town centre is within easy reach.

urbanmoves.com/property-details/48 21494

DARWIN HOUSE

77 Magnetic Crescent, Enfi eld EN3 7FP

A well-presented, top-fl oor apartment which features a reception room with a Juliet balcony and a stylish, partially open-plan kitchen. There is a convenient fi tted wardrobe in the bedroom and additional useful storage space situated in the hallway. The bathroom has a mix of large format tiles and pencil mosaics and the energy effi ciency rating is good, thanks to modern insulation standards, double glazing and gas central heating. The property comes with use of a parking space and is also just a short walk from Enfi eld Lock station which provides services to a number of destinations, including London Liverpool Street.

urbanmoves.com/property-details/4802279

MATILDA APARTMENTS

4 Earnshaw Street, London WC2H 8AJ

DEPOSIT £13,600 £13,600 FMV £340,000

A rare chance to buy a shared ownership apartment in such a desirable and central location. The stylishly presented property is on the 12th fl oor and has a 23ft long main room with an open-plan kitchen featuring sleek, handle-less units and attractive honeycomb-effect splashbacks. The bedroom is dual aspect with large windows, a Juliet balcony and space for a bank of wardrobes. Matilda Apartments is part of the Renzo Piano/Fletcher Priest-designed Central St Giles, a mixed-use development built around a courtyard, just a couple of minutes’ walk from Tottenham Court Road station. There are a number of other transport connections available, along with nearby places of interest including Covent Garden, Carnaby Street, the British Museum, Ronnie Scott’s Jazz Club, the fi lm-premiere-favoured cinemas of Leicester Square and the numerous theatres or restaurants that the area is so well known for.

urbanmoves.com/property-details/4942999

ratio. In this instance we’ll do the maths to see if purchasing a larger share would work for you.

NEXT STEPS

Now that it all makes sense, the next steps are to search for a property and apply! You can do this via the Urban Moves website, or our Share to Buy developer page. To ensure you are absolutely in the right position to buy, make sure you have your documents ready; this would typically include: … Three months of pay slips … Three months of bank statements … Proof of savings/deposit (eg savings account statement. If you’re using a gifted deposit, you may also be required to provide evidence of the deposit on a benefactor’s bank statement) … Passport/photo ID (full colour copies) … Your credit report … Two years of company accounts and/or

SA302 Returns (if self-employed).

MYTHBUSTING

Myth: Shared ownership means that I’ll be living with the person I’m sharing with. Truth: Nope! You are “sharing ownership” of the property with the housing association, paying a mortgage on the share you own and rent on the share you don’t own. Myth: You’re only eligible if you’re a fi rst time buyer! Truth: Nope! It is true that to be eligible you cannot own another property at the time of purchase in the UK or abroad – but if you have previously owned a property and don’t now, or have a sale agreed on the property you own which will complete on or before the completion date of the shared ownership property you want, then you’re good to go! Myth: You’re not allowed to redecorate a shared ownership home! Truth: Nope! It’s your home, paint that statement wall! Change those granny tiles! Just be aware that your lease will be specifi c about more involved structural changes or, for example, installing wood fl ooring without prior permission from the housing association. Myth: Paying rent AND a mortgage? Surely that is way more expensive than just renting? Truth: Nope! In most cases it is cheaper because the rent is usually less than private rent would be, and your mortgage would be smaller! Myth: Shared ownership is really just a London thing. Truth: Nope! There are shared ownership homes up and down the country, from one bed apartments to large family homes. Myth: When you buy shared ownership, you’ll never own all of it. Truth: Nope! Check out “staircasing”. With most shared ownership properties, you can “staircase” up to 100% ownership over time, as and when you can afford to. Myth: Mortgage providers will not lend on a shared ownership mortgage! Truth: Nope! There are some providers that won’t lend on a shared ownership but there are still many options out there. Myth: You’ll never be able to sell a shared ownership home Truth: Nope! In fact, that’s what we do! We help you sell your shared ownership home! The only difference is that you’ll have to notify your housing association and give them time to fi nd you a new shared ownership buyer. This way more properties stay as shared ownership homes, so that more people like you can get on the property ladder… That’s kind of our whole thing!