First-time buyer schemes

It can be confusing trying to find out what schemes and benefits are available to first-time homebuyers across the UK.

Shared Ownership

If you can’t afford to buy a property outright, Shared Ownership gives you the chance to purchase a percentage of the property instead. You can purchase between 25–75 per cent and pay a low-cost rent on the remaining share you don't own—the more you own the lower the rent will be.

The scheme is mostly available on new build homes or flats and is ideal for those who may need a bigger property or don't quite yet have the funds to buy a property outright.

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To be eligible, you need to meet the following criteria:

• your combined income is £80,000 or less (£90,000 in London, £60,000 in Wales)
• you are not able to afford a suitable home on the open market
• you are not in mortgage or rent arrears
• you have a 5–10 per cent deposit for your share of the property

Service charges
You will have to pay a general service charge on top of your rent for caretaking and maintenance of communal areas and ground rent. Service charges can vary from year to year and they can go up or down so be prepared for possible increases in the future. The details of service charges and rent payments will be covered in your contract and you can also speak to the housing association if you have any concerns.

Staircasing
Through a process known as 'staircasing', you have the opportunity to buy more shares of the property as and when you can afford to, eventually even owning 100 per cent of the property. Your rent payments will change accordingly and restrictions on subletting are often lifted.

If you staircase to 100 per cent, you will also be able to sell your property on the open market without having to notify housing association or be limited by the offers you can accept (see below). However, when it comes to increasing your stake in the property, it’s not just the price of buying the share you need to think about. You will also need to factor in legal fees, a RICS valuation and survey costs.

Selling a Shared Ownership property

You can sell your share of the property at any time but you must first notify your housing association and obtain a valuation from an independent RICS surveyor. The process of selling your share is known as assignment. The housing association will have the right to find a buyer (usually over an eight week period) before you can put it on the market with an estate agent, but remember there will be added fees for using an agent and the buyer must always meet the Shared Ownership eligibility criteria.

The total sum you and the housing association will receive will depend on the RICS surveyor's valuation of the property at that time—you will not be able to accept a higher or lower offer for your share in the property. However, this does not apply if you have previously staircased to own 100 per cent of the property.

Simultaneous staircasing

It is also possible in most circumstances to sell 100 per cent your property to a buyer even if you don't own the full 100 per cent of the property. You are still limited to the RICS valuation of the property and can only accept the considered market value for the property at that time.

During completion you will staircase to full ownership of the property (using the buyer's funds) before selling to the buyer, this is handled by your solictor and usually incurs an extra cost compared to the more standard assignment process. The main benefit of simultaneous staircasing is that the buyer does not have to meet the Shared Ownership eligibility criteria which therefore increases your potential for a sale.