Good news – there is no set minimum income requirement for the shared ownership scheme. Each home available under the scheme will have its own valuation. This will determine the minimum income required to both rent and purchase a share of that property.
The shared ownership scheme was introduced to make homeownership more accessible for those who may be struggling to raise a full deposit, or do not have enough income for a full mortgage. In this article, we are going to answer some of the common questions asked.
Am I eligible for the shared ownership scheme?
The shared ownership scheme is designed to be accessible. For this reason, it is open to a huge number of people. However, there are a few eligibility criteria you must meet.
Firstly, you must be at least 18 years old and not already the owner of a property. And whilst there is no minimum income criteria for shared ownership, there is a maximum income threshold of £80,000 a year (£90,000 in London) per household. This maximum income threshold is in place to ensure that the scheme is restricted to those who actually need it, rather than those who could afford to buy a house on the open market.
Find out more – ‘Who is eligible for shared ownership?’
Can my partner and I combine our incomes to purchase a shared ownership home?
Yes! The shared ownership scheme has proven popular with both individual buyers and couples. As mentioned previously, the maximum income threshold to be eligible for the scheme is per household.
This means that as long as you and your partner meet all the eligibility criteria for shared ownership and jointly earn under the maximum income thresholds, then you can combine your incomes to purchase a shared ownership home.
Can I use the shared ownership scheme if I am unemployed?
Purchasing any home when unemployed can be problematic, including purchasing a shared ownership property. That being said, it is not impossible to use the shared ownership scheme if you are unemployed.
Housing Associations will allow the individual to buy their percentage as cash as long as they are able to meet the affordability requirements needed for the rent. In some cases, retired customers have purchased their share as cash and used their pension in order to afford the rent.
Can I purchase a shared ownership home if I am on benefits?
If you are to buy your share with cash, the Housing Association should be able to accept your benefits as a suitable way to pay for the rent.
If you’re unable to purchase cash and need a mortgage, it will be down to lenders criteria. Currently, every lender requires the applicant to be employed. They will use benefit income to help with affordability, but it can’t be the only form of income.
Benefits can be a little tricky to navigate. Each lender has a different view on which they view acceptable for an application. They also may decline benefit income depending on your individual circumstances and your children’s ages (if applicable).
If you are on benefits and are interested in using the shared ownership scheme, it is a good idea to enlist the help of a specialist mortgage advisor and broker who will be able to approach the right lenders for you.
Got more questions about the shared ownership scheme? We’d love to help you out and take the next step with you! Get in touch with our shared ownership specialists today.