Affordable home ownership

'Affordable home ownership' covers options for people who can't afford to rent or buy a property 'on the open market' - it's also known as 'low cost home ownership'. You can:

Discount sale properties

Under the Discount Sale scheme:

  • the purchaser buys 100% of a property
  • the price that is lower than the open market
  • the sale is administered by housing associations
  • the buyer obtains a mortgage for the discounted price
  • the buyer does not pay rent on the remainder
  • the buyer cannot purchase any shares in the property as it is a 'fixed equity' home

Typical Discount Sale property prices range from £58,000 for a one bed flat to £103,000 for a four-bed house, but prices can vary for individual sites.

Selling Discount Sale properties

If sold on, Discount Sale properties must:

  • be sold at the same discount percentage at which they were bought
  • be sold to someone who is unable to afford a home on the open market
  • be notified to the registered provider or housing association that manages the property

If a Discount Sale property is re-valued at the time of a sale, the seller will receive a proportion of the rise, or fall, in value, based on the original discount percentage.

We strongly advise that you seek legal advice about marketing Discount Sale properties to ensure that you follow the correct process.

Shared ownership properties

Shared ownership properties are jointly owned by a purchaser and a registered provider (or housing association).

Under the Shared Ownership scheme the purchaser:

  • buys a share of a property (usually between 25% and 75%)
  • the purchaser pays rent on the remaining share
  • makes two monthly payments, one for the mortgage and one for the rent
  • may increase or decrease their share in the property (known as 'staircasing'), until it's purchased outright

In most cases combined rent and mortgage cost are less than taking a mortgage out on the entire property.

There are instances when it's not possible to purchase 100% of a shared ownership property, for example if the property has been built on a 'designated rural exception site'.

Selling Shared Ownership properties

If Shared Ownership properties are sold on:

  • the proceeds are split according to the percentage ownership
  • if 'staircased' the current percentage is used to calculate ownership

Help to buy

'Help to Buy' is a government scheme which helps buyers to purchase a property, funded by a mortgage. A mortgage is taken out with monthly payments in the normal way. A deposit is still required.

Also see

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