In this guide
1. Overview
Shared Ownership – Wales provides support to those wanting to buy a home but cannot quite afford the purchase of 100% of the home at the full market value.
How it works
With Shared Ownership – Wales:
- you can buy a share of the home and pay rent on the remaining share
- you can purchase of an initial share of between 25% to 75% of the value of the chosen property
- you must take out a repayment mortgage for the share of the home purchased
- you can increase your share in the property at anytime
Financial example of initial purchase
| Home value at initial sale | £200,000 |
|---|---|
| Equity share purchased at initial sale | 30% |
| Payment to provider at initial sale | £60,000 |
| Deposit requirement | £6,000 |
| Mortgage requirement | £54,000 |
|
Mortgage monthly requirement (Based on a 25 year mortgage at 4.5%) |
£300 per month (£69 per week) |
| Equity share retained by provider | 70% |
| Value of share retained by provider | £140,000 |
| Maximum annual rent | £3,850 |
| Max monthly rent | £321 per month (£74 per week) |
| Combined mortgage and rent per month | £621 per month (£300 (mortgage) + £321 (rent)) |
If the applicant had been able to purchase outright their monthly mortgage payment based on a 10% deposit (£20k) on 25 year mortgage at 4.5% would be £1,000 per month.
Financial example of increasing the share in your home (staircasing)
You will have the opportunity to buy more shares in your home this is known as ‘staircasing’.
| Home value at staircasing | £220,000 |
|---|---|
| Equity share to be purchased at staircasing | 20% |
| Payment to landlord at staircasing | £44,000 |
| Share owned by you after staircasing | 50% |
| Equity share retained by landlord | 50% |
| Rental payment before staircasing | £385 per month |
| Rental payment after staircasing | £275 per month |