The three types of shared ownership

One - General needs shared ownership

This is commonly called New Build HomeBuy and it’s funded by the Government through Housing Associations.

Key Features

• These are normally newly built properties that disabled people may apply for alongside other any other applicant.
• The Government provides some of the finance to the Housing Association which helps to keep rents down.
• These schemes are usually aimed at young working people on modest incomes. Housing Associations wouldn’t normally market them to disabled people who aren’t working, unless the opportunity and need was bought to their attention.
• The main disadvantage is that most of these properties place the responsibility for repairs and maintenance on the homeowner, which can be problematic if you have to rely on state benefits to make up your income. To overcome this problem the standard lease can be amended for disabled people to place the responsibility on the Housing Association. This is then covered by a service charge which is eligible for Housing Benefit.
• Limited repairs, improvements and adaptations can be made to these properties, but only if you engage with the Housing Association very early in the building phase.

Two – Shared Ownership for Disabled People

This is commonly known as H.O.L.D – Home Ownership for people with Long-term Disabilities. Again it’s funded by the Government through Housing Associations. The key difference here though is that the buyer is able to choose a property from the open market, just like everyone else.

Key Features

• The Government provides some of the finance to the Housing Association which helps to keep rents down.
• The schemes always have a suitable lease for disabled people, ensuring that the Housing Association’s responsible for repairs and maintenance. Again this is then covered by a service charge which is eligible for Housing Benefit.
• The main disadvantage of the H.O.L.D scheme is that relatively few Housing Associations have applied for funding from the Government. So it’s not currently available in all areas of the country.

Three – Shared Ownership using a Family or Trust Fund

Commonly known as Family Funded Shared Ownership, this is funded by parents, a Trust Fund or other sources related to the buyer.

Key Features

• The money’s given to the Housing Association in the form of a loan, replacing the funding that would normally come from the Government.
• This loan is covered by an agreement where:
  
  
  • No interest is paid to the lender.
  • The loan is used by the Housing Association to purchase its share of the property – not the homeowners share.
  • The loan is repaid upon the sale of the property together with the corresponding share of the property valuation growth.
• The funding from the family or Trust Fund helps to keep the rent as low as possible.
• The schemes always have a suitable lease for disabled people, ensuring that the Housing Association’s responsible for repairs and maintenance. Again this is then covered by a service charge which is eligible for Housing Benefit.
• The main advantage of this scheme is that it can provide housing for disabled people at far less than the full market cost.
• This scheme also offers the most flexibility in terms of the choice of property – even in relatively expensive areas.
• The main disadvantage of this scheme is that a minimum investment of £30,000 is required.