Shared Equity Checklist for New Build


First Time Buyer

First Time Buyer magazine is dedicated to helping people get on to the housing ladder. Many think it is impossible to buy their first home, but there are options available such as shared ownership and shared equity which are making it possible. The magazine offers lots of information, advice, and helpful hints and tips.

The magazine is the first on-the-shelf bi-monthly publication dedicated to the world of affordable homes and to help you access great deals you might not otherwise know existed.

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Beware that even if the developer is offering a shared equity scheme they may only offer the scheme on certain plots or properties, not every property on every site

 

Find out what level of shared equity the developer will offer you. Typically they are around 85%. So if the property is being sold for £200,000, you will initially only
have to pay for £170,000  

 

Find out how quickly the balance owed will need be paid. Some offers only extend to one year, then you have to start paying back the money as a loan. Other deals may require nothing for the next 5 or even 10 years 

 

Once you have found shared equity deals, it is important to make sure you don't compromise on quality to get the deal. You will need to maintain the property and live in it, so for example, you don't want paper walls or poor quality window fittings

 

Always ask to see a copy of gas and ideally electrical safety certificates, the EPC will tell you how much your running will be (eg gas/water/electrics)

 

Find a good legal company who will look after your interests. Sometimes this will be someone recommended by the developer, but sometimes their business relies on the deveoper, so they might not 'fight your corner' as hard as an independent solicitor would

 

Find a good broker who has dealt with shared equity cases before, ideally with the same developer, this will help make sure they have the experience to find you the right mortgage deal. Ideally you should NOT have to pay a broker unless you take up their recommendation. 

 

Just because you are getting a shared equity deal, doesn't mean you can't negotiate extras, like landscaping the garden, better kitchen appliances etc

 

Always check carefully the paperwork from lenders/brokers and your legal company. Make sure the price is as agreed on the contract and make sure the date for your completion is right too - developers can change this if they haven't completed yet, so check by how many months they can bring the sale forward - or delay it

 

Ensure in your contract to exchange it allows you to have a 'snagging survey' just prior to completion so any problems with the property can be highlighted - and more importantly fixed - before you move in 

 

You can move in on completion day, but make sure you budget to pay back the developer and don't rely on house price growth to increase the equity in your home to secure a higher mortgage in the future. Make sure you can afford both the mortgage and any  repayments required by the developer 

 


All our information is brought to you by Kate Faulkner, author of
Which? Property books and one of the UK's top property experts.
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