Co-ownership allows you to become a home owner through “equity sharing”. “Equity sharing” involves part-renting and part-buying the property. The scheme is aimed mostly at first time buyers and people on low income. You can buy any property apart from Housing Executive or housing association properties.
Co-ownership
allows you to part-buy and part-rent your home. To start with, you need to buy
at least 40% of the value of the property, through a mortgage in the usual way.
You will have to pay the rent on the remaining value of your home.
You can buy as
much as you can afford initially, up to 75% of the property value. You can
increase your share after that all at once, in smaller amounts or not at all.
You must be over
18 and not able to afford the property on the open market, without the help of
Co-Ownership. You usually must be a first time buyer and have a low income. However,
people in other circumstances are also considered. You may be able to apply if:
You will not be able to purchase any Housing Executive or housing association property. NICHA must be able to value the property you apply to buy. If you wish to buy a property up to 10 years old, it should be covered by the NHBC 10-year warranty or equivalent.
You can only purchase Co-Ownership property in Northern Ireland that is valued below certain government limits. These ‘value limits’ vary according to:
the size of the property
the council area you live in
A list of the 'value limits' for each council area is available on the Co-Ownership site .
First, contact the Northern Ireland Co-Ownership Housing Association (NICHA) for personal advice about your circumstances. NICHA will be able to advise you whether you will be able to apply.
Secondly, find the property you wish to buy. Tell the estate agent or owner of the property that you want to buy through Co-ownership. The estate agent or owner will help you complete the application form. Send the completed application form with appropriate fees (explained below) to NICHA.
NICHA will interview you and value the property before deciding if your application is successful. If your application is successful, you will have to arrange a mortgage to cover the part of the property you are going to buy. The remainder of the process of purchasing the property is the same as buying a home normally. You will have to sign a Co-Ownership agreement to finalise the purchase of your home.
Co-Ownership aims to keep costs down compared to buying a house on an open market. You have to repay mortgage on your share of the equity and pay a monthly rent for NICHA’s share, but when the two amounts are combined the total is less than a single large mortgage payment.
Mortgage/Rent costs
Your mortgage payments will usually be considerably lower than repayments of a conventional mortgage, as you have borrowed a smaller amount of money.
Your rental amount will depend on your equity share and the share financed by NICHA. The larger your share, the lower your rent is.
Rent is set to be affordable, usually at 2.5% of the value of NICHA’s contribution in the purchase of your property. This works out at approximately £2.08 a month per every £1000 NICHA’s contributed.
Co-Ownership rents are due on the first day of each month in advance.
Fees
You will have to pay fees when you apply for Co-ownership housing. You must send £250 with your application form to cover valuation and legal fees. You may be able to refund some of the money paid for fees after your application is processed.
Legal package fees
NICHA offers a Legal Package to potential buyers, where both parties use the same solicitor. NICHA pays the largest portion of legal fees, while you pay for the time taken by the solicitor when working on your behalf. You can ask the solicitor for an assessment of costs involved before you decide to accept the offered package.
If your application is unsuccessful, NICHA will refund your Legal Package fee as soon as possible. If your application is successful, but you decided not to use the Legal Package, NICHA will refund your Legal package fee after completion.
You can choose not to use the package offered by NICHA. However, you will still have to arrange your own solicitor and negotiate the fees directly. This could work out more expensive.
Valuation fee
The valuation fee is not refundable. NICHA arrange a valuation on the property to check that it is suitable for co-ownership. This is similar to a home-buyer's report. NICHA will give you a copy of the report.
A valuation report is not a structural survey. It is usually a good idea to get a licensed surveyor to carry out a structural survey .
You can increase your share of the property at any time, in “slices” or in one go. If you decide to purchase in “slices”, you must increase your share in steps of 12.5% at a time. This is known as ‘staircasing’.
The amount you pay for each 12.5% step depends on the market value of your property at the time you apply to purchase a step. NICHA won’t include any improvements you have carried out since buying the property when working out how much you must pay. Contact NICHA for more information on purchasing further shares.
You can sell your home at any time, provided that the price you are offered is acceptable to NICHA. You get the same percentage of the value of the property that you own.
For example, if you originally bought 50% of the property, and have since bought an additional 25%, you will get 75% of the sale price, and the Northern Ireland Co-Ownership Housing Association gets back the 25% that it still owns.
Content on this site applies to Northern Ireland only.
