Shared Equity is a Low-Cost Home Ownership scheme that helps first-time buyers get on the property ladder.
With an LCHO scheme, you can buy a home at a percentage of its open market value, typically 70%. It’s a more affordable option for buying a home as you need a smaller mortgage and deposit.
Typically, you would need a deposit amount of 5-15% of the 70% equity you will hold in the property, rather than needing a deposit for 100% of the house value, as you normally would.
The remaining cost of the property (30%) is funded by an equity loan. Unlike your mortgage, there are no repayments to be paid on this loan.
You can purchase the whole amount (30%) outright but this is restricted within the first three years of occupation. This means you cannot purchase this equity until you have lived in your home for more than three years.
If you wish to sell your home, you can sell your 70% equity share to another qualifying first-time buyer, and you won’t need to repay the loan. However, if your home is sold for 100% on the open market, the 30% equity loan must be repaid upon completion of the sale.
Find out if you’re eligible and how to apply below:
