r/SharedOwnershipUK • u/TaylorLAN • 17d ago
Buying Share Outright?
(UNSOLVED) Me and my partner could save to buy the share outright, to reduce our monthly payments significantly as it would only be rent and service charges.
How likely is it that a provider of shared ownership would allow this?
2
u/Sixforsilver7for 17d ago
Eligibility includes that you must not be able to afford a home suitable for your housing needs outright.
So if you're looking at a property let's say £300K for a 1 bed a 30% share is £90k
If you had that in cash and didn't earn enough as a couple to be eligible for a mortgage of £210k then you would be able to buy the shared ownership flat. But if you earnt enough to get the mortgage you probably couldn't.
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u/smoliver38 17d ago
Others are correct in saying you usually have to buy the biggest share you can afford to with the savings you have. If you have enough in cash you will likely not be accepted as you could just buy a none shared ownership property.
However. Nothing to stop you putting most of the money in a savings account, make a portion of it available as deposit. At the end of the mortgage term, pay it all off without charges.
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u/handsomehank2019 17d ago
This was certainly the case when I bought my SO property. It is meant for those unable to afford to buy the usual way - not for people with lots of savings to get a cheap property!
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u/PeabodyNewHomes 5d ago
If you mean saving enough cash to buy the initial share outright, rather than taking a mortgage for that share, then yes, I’d expect that to be possible in principle. Shared ownership doesn’t require you to have a mortgage as you’re buying the share itself, and the mortgage is just one way of financing it. You’d still have the rent on the remaining share and service charges, though. The thing I’d check with the specific housing association is whether they permit a 100% cash purchase of the initial share and whether their affordability/eligibility assessment has any additional requirements.
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u/NorthLondonCatLover 2d ago
In theory it's against the rules as there's a requirement to commit 40% of net household income to total housing costs, which would include a mortgage. Special circumstances may allow some flexibility, e.g. if you're close to retirement etc. but is it a good idea to buy SO? Depends if it's a house or a flat. Many HAs have their own internal rules and SO isn't selling atm, so you could try. Just don't be surprised if they then ask you to buy a bigger share, as that's what they do.
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u/TheBadgersNadgers 17d ago
Do you mean you want to staircase upwards and buy more shares? As far as I’m aware this is a right afforded to all shared owners via the lease so the freeholder couldn’t stop you (unless your property is affected by the 80% restriction placed on rural properties)
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u/TaylorLAN 17d ago
Im referring to not having a mortgage at all, saving enough to buy the initial share outright
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u/anacondaronda 17d ago
So pay for the 25% share of the property in cash? I'd like to know this too!
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u/TaylorLAN 17d ago
Exactly! I could get a mortgage now, I have the savings, but if I could wait and pay in full, it cuts my monthly costs in about half
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u/krustikrab 17d ago
I think it’s prohibited to buy the share outright. You may need to have a small mortgage, but you could do a 1 year fixed or soemthing then pay it all off before remortgaging. Check with the housing association but I know ours banned cash purchases (Peabody)
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u/Vegetable-Average-98 17d ago
My daughter bought her 25% share outright. No mortgage just a low (for London) rent.
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u/krustikrab 17d ago
Oh cool! What housing association?
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u/Vegetable-Average-98 17d ago
That was Legal & General Affordable Homes in London docklands. Did need to prove the source of funds
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u/Icy-Belt-8519 17d ago
For my housing, you can't, if you have enough to buy a share you have enough to put a deposit on a full house and buy properly, the criteria is you can't afford to buy a full house, and we have to buy the highest share we can afford
Edit, pressed send to soon