It’s much the same as buying any other new build property – you’ll need a solicitor to do the paperwork and you’ll need a deposit and money for your moving costs. Then you’ll need to be able to afford to pay the mortgage, rent and service charges (if applicable) – which will always be less than privately renting a like-for-like home.
When you apply for an OX Place shared ownership home, we’ll make sure you are registered with the Help To Buy agent (this is a Government requirement). From there, we can help you with an affordability assessment to see if you can afford to buy a shared ownership home. If you are successful, you’ll then do a mortgage assessment which will see if you are able to get a mortgage.
Do I need to pay Stamp Duty on a shared ownership home?
As a first-time buyer you won’t have to pay any stamp duty on your home as long as its total full market value is less than £300,000. If your home is worth more than £300,000 you will pay a 5% stamp duty tax on any amount over this value – not on the total value.
If you’ve owned a property before, you’ll have to pay Stamp Duty on the value of the property above £125,000.
Paying Stamp Duty is slightly different for shared ownership homes as you get some options about when to pay it. Usually, Stamp Duty has to be paid when you complete the purchase of your home. But with shared ownership, you get the option to either pay the whole amount at the start or once you own a share worth £125,000 or more. This allows you to spread the cost of paying Stamp Duty if that’s what’s best for you. Your solicitor will be able to let you know more about what is best for you.
Who decides if a shared ownership home is affordable for me?
It’s important that housing is affordable. It impacts on your quality of life and wellbeing. Anyone buying a shared ownership home will have to have financial checks carried out by Oxford City Council, who you’re buying your home from.
At OX Place and in Oxford, we make sure that you won’t be spending more than 45% of your household income on housing costs – that’s the combination of your mortgage and rental payments in a shared ownership home. That’s because there’s lots of evidence that says that spending more than 45% of your income on housing in Oxford is unsustainable and likely to cause hardship and distress. No one wants a home they can’t afford to enjoy living in.
Who shall I get advice from about my mortgage?
We will help you get advice from a mortgage advisor to see how much you could borrow, what deposit you’ll need and what your interest rate will be. They will know you’re considering a shared ownership home. They’ll need to understand your financial position – your household income, any debts you already have such as loans or credit cards, as well as the money you need to pay out every month, including things like child maintenance payments for example.
They’ll use this information plus insight into your credit score to find the right lender(s) for you. How much money you have in savings to put towards your deposit will also influence the initial percentage share you can buy.
What will my monthly costs be?
This will depend on the value of the home you buy, the share you purchase and the rent you’ll need to pay on the remaining share along with any service charges in apartment blocks. But here at OX Place we’ve committed that it will always be cheaper to live in a shared ownership home than an equivalent one you rent privately.
Don’t forget you’ll also need to be able to pay all the other monthly costs such as council tax, utility bills and home insurance.
Currently, you’ll need at least a 5% deposit to buy a shared ownership home. But that deposit is calculated based on the share you’re buying, not the full market value of the property. You’ll also need savings to cover initial purchase costs such as mortgage and solicitor fees; this is normally around £4,000, but this can change depending on who you use.
To reserve your chosen home, you’ll also need to pay a reservation fee. This will secure the home as yours until a formal offer is made and will usually be between £250 and £500. This cost will be taken off the total purchase price when your sale completes.