Allbricks Vs
Gov Shared Ownership

The Government Shared Ownership scheme gives you the ability to buy a share of a property using a mix of a deposit, mortgage and rent. You buy a portion of a property with a mortgage and on the portion you don’t own, you pay rent. All of the Government Shared Ownership properties are leasehold and the majority are new build properties.

Allbricks isn't part of the Government Shared Ownership scheme. While some areas are similar, we’ve built a different model designed to still help people into their dream homes faster, easier and with more flexibility than existing mortgage-based approaches. We consider ourselves a Gradual Home Ownership solution.
Discover more on the differences here:

Gov Shared Ownership

Allbricks

Qualifications

Gov Shared Ownership

Shared ownership homes are offered by housing associations, local councils, and other organisations. They are called ‘providers’ or the landlord.

To be eligible for the Government Shared Ownership you need to:

  • be a first-time buyer, an existing shared ownership homeowner, or a former homeowner who is unable to afford to buy a suitable house through the open market.
  • be over 18 years old
  • have an annual household income of less than £80,000 (£90,000 in London).
  • you may not be eligible if you have poor credit, you're in mortgage or rent arrears or your savings are not sufficient to cover the process of buying the property.

Allbricks

Allbricks is open to everyone looking to buy their first dream home or move up the property ladder.

  • All home buyers are qualified by putting them through KYC, AML, a credit check and an affordability check to ensure as far as possible that they are able to meet the rental payments
  • You may not be eligible if you have poor credit, you're in mortgage or rent arrears or your savings are not sufficient to cover the process of buying the property.

Starting percentage of ownership and deposit

Gov Shared Ownership

The share you can buy is usually between 25% and 75%. You can buy a 10% share on some homes.

Your deposit is usually between 5% and 10% of the share you’re buying.

Allbricks

Home buyers need either £10,000 or 1% of the home as a deposit, whichever is greater, to get started.

How it works

Gov Shared Ownership

When you buy a home through shared ownership, you:

  • buy a share between 10% and 75% of the home’s full market value. You do this either as a cash buyer or with a mortgage.
  • Pay rent on the portion you don’t own to the landlord

The landlord will review your rent at the times set out in your lease. This is usually once a year. Your rent may go up when it is reviewed. It will not go down.

Ground rent and service charges are also controlled by the landlord or managing agent.

Allbricks

When you buy a home through Allbricks, you:

  • purchase as much as the home as you’d like starting from £10,000 or 1%, whichever is greater.
  • crowdfund the rest with investors
  • pay rent on the portion you don’t own to the investors. The more you own, the less your rent will be.

There is no mortgage involved.

Your rent is secured for the first three years and then we review it annually so it stays in line with market rates. Rent is adjusted not by the investors, instead we take independent advice on the market rent from well-known companies.

Purchasing more of your home

Gov Shared Ownership

You can buy more shares in your home after you become the owner. This is known as 'staircasing'. Once you have owned your shared ownership property for a certain period of time – set in the terms of your lease but usually one to two years – you can purchase further shares in your home.

You can usually buy shares of 10% or more at any time. Some older leases only allow you to buy shares of 25% or more. Some newer leases will allow you to buy shares of 5% or more.

If you bought your home in 2021, you may also be able to buy shares of 1% each year for the first 15 years. Ask your landlord if this applies to you. You cannot buy shares of 2%, 3% or 4%.

On top of the purchase price for the additional shares, there are several other costs involved in staircasing:

  • Surveys. Surveyors aren’t free, and you’ll have to pay for the required valuation report needed each time you staircase.
  • Legal fees. You will need a solicitor or conveyancer to handle the legal work. Bear in mind you will foot the bill for all the legal fees, it won’t be shared with the housing association.
  • Mortgage fees. You may have to pay mortgage fees for a new mortgage. This could range from nothing to £999 depending on the deal and your circumstances.

Allbricks

Whenever investors sell their Bricks, the home buyer always gets first refusal.

From three years after you move in, the investors who joined at crowdfunding will offer you 5% of what they own per annum. Other investors will offer you 5% per annum once they've owned their Bricks for 12 months.

When the home buyer buys more Bricks, Allbricks charges a one-off 2% + VAT transaction fee.

You can buy from a single additional Brick at a time, no need for large chunks of cash to buy more of the property.

You can buy from a single additional Brick at the time, no need for large chunks of cash to buy 1% or more of the property.

Buying 100% of your home

Gov Shared Ownership

Yes, you can buy 100% most of the time.

However, there are some exceptions. In some places, called 'designated protected areas', you may only be able to buy a share of up to 80%. If you buy an older people’s shared ownership (OPSO) home the maximum share you can own is 75%.

The landlord may charge an administration fee each time you buy a share of 5% or more. It’s set by the landlord and can vary from around £150 to around £500.

Allbricks

If you want to buy your home outright you can do that at any time at the market value. You'd need to have funding in place, for example through a mortgage or cash purchase.

We make it really simple, apart from the typical fees such as conveyancing or legal fees, Allbricks doesn't charge any additional fees for buying your home outright. We want to support your choice should you want to own 100%.

Stamp Duty

Gov Shared Ownership

When you first purchase a shared ownership property, you have a choice about how you pay stamp duty. You can either make a one-off payment based on the total market value of the property. Or, you can choose to pay stamp duty in stages, I.e. you pay what is owed on the initial share you buy, then pay again if you buy more shares.

Allbricks

The cost of the stamp duty is split between you and the investors. The amount you pay will be in proportion to the size of your deposit. So if you're putting down 1% of the total purchase price, you'll pay 1% of the stamp duty.

When you buy more of your home direct from the investors, as your Allbricks home is your main residence, you'll pay stamp duty at the standard rate.

Types of properties eligible

Gov Shared Ownership

All shared ownership homes (houses and flats) are leasehold properties.

You can buy:

  • a new-build home being offered as a shared ownership property
  • an existing home through a shared ownership resale scheme

Allbricks

You can be a first-time buyer or making your next move, but the home you buy with Allbricks needs to be your main residence. Currently you can pick a house or flat of your choice within the Greater London area. We will expand to the rest of England shortly.

The home you pick can be either a leasehold, freehold or a share of freehold under certain circumstances. Learn more about which types of homes can be bought through Allbricks in the FAQ.

Maintenance and fees

Gov Shared Ownership

You will need to pay for repairs and maintenance no matter what share you own. Some costs might be covered by the building warranty, or by the landlord if your home has an ‘initial repair period’.

Landlords are now required to help with the costs of “qualifying” essential repairs and maintenance. The landlord will decide if they are essential and they have the right to inspect the home when making a decision.

There is a maximum of £500 per year towards “qualifying” essential repairs and maintenance and it’s only for the first 10 years. After the initial period home owners remain liable for 100% of ongoing costs regardless of the size of their share.

Once you own the home, on top of your mortgage and rent payments you’ll need to also pay for buildings insurance and contents insurance. You may need to also pay:

  • A service charge
  • An estate charge
  • A management fee
  • into a repairs reserve fund

Allbricks

At Allbricks, every home is covered by the Allbricks Maintenance Programme.

You and the investors effectively share the cost of the maintenance programme.

Each time you pay your rent, we deduct 20% to cover the property costs to cover:

  • A dedicated Property Manager
  • Buildings insurance
  • All required safety inspections
  • and an annual repairs budget.

A proportion of your allocation to the maintenance programme gets allocated to a dedicated contingency pot which will help assist with those unexpected events.

Once the contingency allocation is met the additional funds will contribute to redecoration in your home, from repainting to contributing to a new kitchen or a new bathroom.

Selling a Government Shared Ownership scheme property

Gov Shared Ownership

When you give the landlord notice that you want to sell your home, the landlord has a ‘nomination period’. This means the landlord has a period of time (4, 8 or 12 weeks, depending on the lease) to find a buyer.

If the landlord does not find a buyer within the nomination period, you can sell your share yourself on the open market.

If the landlord finds a buyer during the nomination period, the sale price will be no more than the current market value of your share. It will be based on a valuation by a surveyor who is registered with the Royal Institution of Chartered Surveyors (RICS). Valuation reports are normally only valid for three months. If your sale does not complete, you may need to pay an extension fee or a new valuation report might be required.

The buyer for your property must meet the qualification criteria for the Government Shared Ownership Scheme (detailed above), reducing the available pool of potential candidates.

Allbricks

If you wanted to sell up, you'd receive your share of the proceeds when the sale goes through. Here's how it would work:

  • We'd ask the investors to vote on whether they'd want us to try and sell your bricks to a new home buyer (at the current market value) or put the whole property up for sale.
  • If the majority decision was to find a new buyer, then you'd receive the market value of your bricks when that sale completes.
  • If the majority decision was to put the property up for sale, we'd talk to a range of estate agents. Once the sale completes and the agent’s commission is paid, you would receive your share of the proceeds in proportion to the amount of the property you own.

Discover more here:
https://www.gov.uk/shared-ownership-scheme
https://hoa.org.uk/2022/01/shared-ownership-changes/

 

Your home is at risk of being repossessed if you don’t pay your rent.