Prospective home owners in the Gateshead Council area have been handed a boost after the council's cabinet approved plans to introduce a shared ownership policy.
The move will allow people who want to own their own homes but are financially unable to do so to purchase as little as 10 per cent of the property, while paying an affordable rent on the remaining share which would be owned by Gateshead Council.
The buyer would then be able to purchase more of their home via a process known as 'staircasing', eventually building up to 100%. If repayments become difficult, they would be able to sell equity in their home back to the council.
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It comes after the council agreed to purchase 44 new build homes on Whitley Court, with eight of those houses being allocated as the area's first shared ownership properties. The project is being supported with a grant from Homes England, who set the criteria for the scheme.
To be eligible, the resident must:
- Have registered with the Help to Buy agent and been assessed as eligible to purchase a Shared Ownership property.
- Have an annual household income of less than £80,000.
- Must be unable to purchase a home suitable for their needs without assistance.
- Can be a current homeowner provided their existing property is sold either prior to or simultaneous to the purchase of the shared ownership property
- Must not have any outstanding credit issues (i.e., unsatisfied defaults or county court judgements
As well as Homes England's criteria, Gateshead Council will also require the following criteria to be met:
- Current or former Gateshead Council tenants should have a clear rent account and have no substantial breaches of tenancy conditions.
- Applicants must have sufficient funds to meet the initial costs of buying a home and can provide evidence of funds or mortgage availability for the purchase of the property.
- Be able to demonstrate they can afford to purchase a share equal or greater than 10 per cent of the property value but they are unable to afford a 100 per cent purchase less than the maximum where applicable.
- Demonstrate the ability to afford the regular payments and costs involved in buying a home. Where circumstances require it, there may be additional scheme specific criteria such as a local connection with the Gateshead area.
One of the following must also be true:
- you’re a first-time buyer
- you used to own a home, but cannot afford to buy one now
- you own a home and want to move but cannot afford a new home suitable for your needs and the sale of that property is completed prior or simultaneously with the purchase of the shared ownership
- you’re forming a new household - for example, after a relationship breakdown
- you’re an existing shared owner and want to move
The cabinet unanimously agreed to introduce the policy. It will be considered by full council at the next meeting.
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