This guide outlines Homes England’s updated Shared Ownership affordability guidelines, effective from August 1st, 2024. Originally released on May 17th, 2024, alongside previous guidance, this revision allows time for smooth implementation.
6.1 General Principles
6.1.1 Providers must assess all Shared Ownership applications fairly, equitably, and consistently, adhering to Homes England’s guidelines. Interpretation and application of this guidance must not disadvantage any applicant. The final decision on application acceptance rests with the provider.
6.1.2 Providers are required to publish transparent information and policies detailing their Shared Ownership application process and key decision-making factors. Once a decision is made, providers should offer applicants clear, detailed, and reasoned explanations.
6.1.3 Shared Ownership applicants are entitled to a free financial assessment from a qualified and experienced advisor regulated for mortgage advice (hereafter referred to as ‘the advisor’). However, applicants are not obligated to secure a mortgage through this advisor.
6.1.4 Providers must offer the full spectrum of share percentages relevant to the Shared Ownership model. The purchased share level must align with the applicant’s affordability, needs, and circumstances, as advised by the advisor, and providers must provide evidence of this suitability. Providers should adhere to advisor recommendations on all mortgage-related matters and avoid activities they are not regulated for, such as giving financial advice.
6.1.5 For grant-funded Shared Ownership homes, providers must consider applicants on a first-come, first-served basis, except where the Government has designated priority groups or locations. The process for meeting this funding condition must be clearly defined and accessible to applicants and relevant parties.
6.1.6 Since grant-funded Shared Ownership homes utilize public funds, both providers and Homes England are responsible for ensuring optimal use of these resources. Applicants should be encouraged to purchase the largest suitable share, considering their individual circumstances and affordability, including any anticipated future changes. Under no circumstances should applicants be pressured or encouraged to overextend themselves financially.
6.1.7 Providers must establish a surplus monthly income policy that specifies the minimum monthly surplus income (in £ and/or percentage terms) an applicant should retain after covering all income and expenditure elements. A maximum surplus income should not be set to accommodate diverse applicant circumstances. This policy should be readily available to applicants and advisors.
6.1.8 Applicants unable to secure a mortgage, or if a suitable mortgage product is unavailable, may purchase their share in cash if they have sufficient savings. Like all applicants, they should consult an advisor to confirm mortgage unavailability or unsuitability. Providers will determine the appropriate share for cash purchases, ensuring fair assessment and decision-making.
6.1.9 While applicants are expected to utilize savings, assets, and investments for their purchase, they are permitted to retain a certain level of savings. This should consider mortgage requirements, the provider’s minimum income policy (paragraph 6.1.7), and the applicant’s individual situation. There is no fixed savings limit, as it varies based on individual circumstances.
6.1.10 For resale Shared Ownership homes, providers should generally follow Homes England’s guidance principles, but can exercise greater flexibility to avoid restricting potential purchasers for existing shared owners.
6.1.11 Providers seeking clarification on affordability guidance should contact Homes England at [email protected].
6.2 Establishing Applicant Eligibility and Priority
Applicant eligibility
6.2.1 Providers are responsible for determining Shared Ownership eligibility (see section 3) and making final applicant acceptance decisions, in line with section 6.1 principles.
6.2.2 Eligibility verification may be outsourced, but providers remain fully accountable for applicant eligibility assessment. Outsourcing requires due diligence and written agreements covering data sharing and Service Level Agreements.
6.2.3 Regardless of the eligibility determination method, providers must maintain a complete record of each decision for Homes England Compliance Audits.
6.2.4 Section 3 of this Capital Funding Guide chapter ([#eligibility]) and section 6.6 below provide further details on applicant eligibility criteria and household income calculation issues for grant-funded Shared Ownership homes.
Applicant priority
6.2.5 When Shared Ownership home demand exceeds supply, providers must prioritize applicants on a first-come, first-served basis, a principle established by the Government in 2016 and a condition of Homes England funding.
6.2.6 Government exceptions to this principle include qualifying Ministry of Defence personnel and protected sites or areas where local connection priority is permissible. See section 3.2 for details on these exceptions.
6.2.7 Providers determine the best implementation method, but applicant prioritization should not be influenced by affordable share size. All applicants deemed affordable for the minimum available share and meeting provider policies (section 6.4) should be prioritized based on the first-come, first-served requirement.
6.2.8 Most developments with multiple Shared Ownership homes are expected to sell across a range of equity shares. While providers may have a ‘target’ average equity share for development economics, the first-come, first-served requirement for eligible applicants affordable for the minimum share must be met.
6.2.9 To clarify, applicants only able to afford lower shares should not be excluded or deprioritized. ‘Target’ average shares should not be considered minimum purchase shares. Providers should not balance lower share purchases with higher share purchases if this breaches first-come, first-served prioritization.
6.2.10 Providers may advertise illustrative shares above the minimum available, but marketing materials must clarify that this is for illustration only (e.g., to indicate purchase, rent costs) and not the minimum purchasable share. This applies to new Shared Ownership home sales. Resales have a minimum purchasable share, which is the seller’s share (paragraphs 6.7.14 to 6.7.16 for resale guidance).
6.3 The Use of Professional Advisors
6.3.1 A qualified and experienced advisor, regulated for mortgage advice, must assess an applicant’s mortgage eligibility and affordable amount. Due to the specialized nature of Shared Ownership mortgages, advisors should be experienced and knowledgeable in this area, with access to various Shared Ownership mortgage lenders.
6.3.2 Providers may establish a panel of advisors for mortgage affordability assessments.
6.3.3 Providers should verify advisor suitability and retain evidence, ensuring advisors meet these minimum criteria:
- Regulated and qualified to give mortgage advice.
- Good working knowledge of Shared Ownership.
- Access to a suitable range of Shared Ownership mortgage lenders for accurate mortgage availability assessment.
- Read and understood section 3 and section 6 on ‘Applicant eligibility’ and ‘Affordability guidance’.
- Read and understood any applicable individual provider policies for applicant eligibility and affordability assessment.
6.3.4 Providers with preferred advisors or panels should conduct regular suitability reviews, with review frequency determined by the provider.
6.3.5 Providers have discretion to accept mortgage advice from advisors outside their panel, based on knowledge of the advisor and criteria compliance (paragraphs 6.3.1 and 6.3.3). Doubts may lead providers to refer applicants to panel advisors for reassessment, with clear rationale and no cost to the applicant.
6.3.6 This scenario is more likely for resale Shared Ownership homes outside the nomination period, where providers have less control if sellers use external agents. Providers can adopt a more flexible approach to avoid barriers for existing shared owners selling their homes.
6.3.7 Providers must not mandate applicants to use a specific advisor for their mortgage, regardless of who conducted the financial assessment. Providers also cannot receive financial or other incentives from advisors for panel inclusion.
6.3.8 Providers may formalize relationships with preferred advisors or panels through written agreements, particularly for outsourcing document collection or Anti-Money Laundering (AML) checks.
6.3.9 Providers must not override or unduly influence advisor views on suitable mortgages, which inform share purchase decisions. Examples include requesting specific mortgage terms or lower rates to increase purchasable share, or advising debt restructuring or pension changes. Providers should avoid activities they are not regulated for.
6.3.10 However, discussions between providers and advisors are permitted regarding policy application or interpretation, or requests for further information explaining suitable mortgage amounts or products if insufficiently explained.
6.3.11 Advisors must inform applicants when advice falls outside their regulated activities.
6.4 Provider Specific Policies
6.4.1 Homes England requires providers to publish two policies for Shared Ownership homes receiving grant funding and/or part of Affordable Homes Programmes:
a) A first-come, first-served policy for prioritizing eligible applicants (section 6.2 for details).
b) A minimum monthly surplus income policy for applicants. This policy defines the minimum surplus income – in monetary and/or percentage terms – applicants should have monthly after accounting for all housing costs, commitments, and expenditures established in their budget planner. Providers should not set a maximum surplus income to accommodate individual applicant circumstances (paragraphs [#para617B] and [#para649B]).
Further guidance on a minimum monthly surplus income policy
Section 6.7.8 details the methodology for calculating monthly surplus income (steps 1-7), part of Homes England’s revised methodology for assessing affordable share purchases. Percentage-based minimum monthly surplus income policies should base the percentage on net income available for mortgage purposes, calculated as follows. Similarly, monetary value-based policies should use the same calculation:
- (A) Gross income
- (B) Less gross deductions (tax, National Insurance, student loan, etc.)
- (C) Less known commitments (loans, credit cards, childcare, etc.)
- (D) Less housing costs of the Shared Ownership purchase (rent and service charges)
- (A – B – C – D) = income available to support a mortgage, other essential expenditure (identified through a budget planner) and to meet the provider’s surplus income policy
Providers will determine monthly surplus income policy levels based on their knowledge of household incomes and living costs in their operational areas. Varying minimum surplus income requirements based on provider size, risk level, operational geography, applicant household size/composition, and Shared Ownership experience would be reasonable.
6.4.2 Providers may adopt additional Shared Ownership applicant policies, provided they do not conflict with Homes England’s general affordability assessment principles (section 6.1).
6.4.3 All provider policies must be published on their website and available in other accessible formats. Applicants and advisors should be directed to all relevant policies and information on Shared Ownership application assessments.
6.4.4 Policies must not disadvantage groups with protected characteristics. For example, policies should not penalize benefit-reliant applicants or discriminate based on visa or residency status (section 3.6).
6.4.5 Policies must be based on provider risk assessment, and internal records should document policy rationale. Policy ranges could be influenced by provider size, geography, household size/composition, and Shared Ownership experience.
6.4.6 Providers are free to establish other policies as they deem fit, such as minimum deposit requirements or adverse credit policies.
6.4.7 Providers should review and republish policies as needed, with review frequency determined by the provider.
6.4.8 Rigid or blanket policies for certain affordability assessment aspects (e.g., absolute maximum limits) should be avoided to prevent applicant disadvantage or unsuitable share purchase outcomes. Individual applicant circumstances should be considered in all assessments.
6.4.9 For example, providers should not create blanket policies on prescribed savings amounts applicants can retain post-purchase, or establish maximum monthly surplus income limits (paragraph 6.4.1 b)). However, indicative amounts or percentages above which providers require additional applicant information for judgment would be reasonable.
6.5 Principles of the Affordability Assessment Process
6.5.1 Providers should adopt a proportionate approach to affordability assessments to avoid overly burdensome processes for applicants and advisors when demand exceeds supply. This could involve a two-stage process (section 6.5.11) or limiting applicants referred for assessment per available home, or a combination. The approach may depend on development size and/or Shared Ownership home demand.
6.5.2 When Shared Ownership home demand exceeds supply, providers and advisors should agree on appropriate applicant management methodologies or processes. Applicants should be informed upfront about the process.
6.5.3 Homes England suggests, but does not require, a two-stage approach as outlined below. Providers with a one-applicant-per-plot process may find a single-stage assessment more proportionate. Regardless of approach, providers must ensure first-come, first-served applicant prioritization is met (section 6.2).
6.5.4 Applicant assessments should be free of charge, regardless of the assessment approach. An exception is cash purchase applicants seeking professional financial advisor advice (paragraph 6.10.6).
6.5.5 While Homes England has withdrawn its indicative affordability calculator, advisors and providers can use their own tools to give applicants initial affordability indications. Simple calculator tools could indicate affordability for the minimum share or provide a range of potentially affordable shares.
6.5.6 Calculator tool limitations must be understood, and result interpretation must not exclude or disadvantage certain applicants. This includes those only able to afford smaller shares, those with non-standard income, or applicants near affordability borderline. Simple affordability calculators cannot definitively determine affordable shares, and results should not prevent applicants from accessing full, detailed affordability assessments if desired.
6.5.7 Initial affordability indications from calculators are distinct from definitive calculators advisors may develop to align with Homes England’s required methodology for determining comfortably affordable shares (section 6.7).
6.5.8 Providers must ensure employees do not engage in activities or discussions related to Shared Ownership applicant assessments for which they are not qualified or regulated.
6.5.9 While the final applicant acceptance decision rests with the Shared Ownership provider, considering all available information, providers should not challenge or override advisor assessments of suitable mortgage products/levels (section 6.7). All provider decisions must fully consider applicant individual circumstances and avoid undue applicant disadvantage.
6.5.10 Providers must maintain appropriate records and documentation to meet Homes England Compliance Audit requirements. While sign-off sheets (section 6.8) are fundamental, other relevant decision-making documentation should also be retained.
6.5.11 Example of a two-stage affordability assessment process
The following outlines a possible two-stage approach to assessing applicant affordability and suitable share purchases. This two-stage approach is not mandatory if providers and advisors are satisfied their processes allow for the more detailed assessment in Stage 2 to be the starting point. Any process must ensure no applicant is disadvantaged and first-come, first-served applicant management is maintained.
6.5.11.1 Initial assessment (Stage 1)
This initial stage would be a high-level check that an applicant:
a) Is likely to be able to purchase the minimum share for new Shared Ownership homes (or the resale share) and;
b) Meets relevant provider policies for Shared Ownership home sales (section 6.4).
Advisors, with provider assistance as needed, will determine required information and methods/tools for this initial assessment. A simple indicative affordability calculator tool (paragraphs 6.5.5 to 6.5.7) could be used. Information required for this initial assessment is expected to be less detailed than a full budget planner (‘Stage 2’ assessment).
In cases of doubt, or if advisors are uncertain about points a) and b) based on initial information, they should err on the side of caution and allow the applicant to proceed to the next stage for more detailed checks.
If an applicant is rejected at Stage 1, the advisor should provide a thorough explanation to the provider for communication to the applicant. Providers should be aware that in exceptional cases (e.g., suspected fraud or money laundering), advisors may be unable to disclose the decline reason.
Homes England provides a simple initial assessment (Stage 1) sign-off sheet requiring minimal information to formalize outcomes. However, using this form is not mandatory. Providers and advisors can agree to use modified versions or other means to communicate Stage 1 assessment outcomes.
6.5.11.2 Full assessment (Stage 2)
Applicants passing Stage 1 proceed to Stage 2, a more detailed assessment of their income, expenditure, circumstances, and preferences, including known or likely future income/expenditure changes. This stage involves a budget planner.
The purpose is to determine a share purchase suitable for the applicant’s affordability and sustainability (including future changes); one that avoids undue financial overcommitment based on current information; and one that aligns with the provider’s minimum surplus income policy and other relevant policies (section 6.4).
More detail on the methodology for achieving this is in section 6.7.
Advisors are expected to use their Shared Ownership knowledge and experience to determine the best assessment methods, including appropriate tools (e.g., budget planners) and understanding of mortgage lender and provider policies.
Assessments should consider relevant mortgage lending criteria and policies, applicant individual circumstances, and ensure fair and consistent treatment. Advisors should also be aware of and consider provider-specific policies or information (section 6.4) to aid assessment.
Advisors need to be aware of provider approaches to meeting Government requirements for first-come, first-served Shared Ownership applicant consideration (excepting priority for qualifying Military of Defence personnel, National Parks, Areas of Outstanding Natural Beauty, and rural exception sites – section 3.2). However, meeting this Government requirement is solely the provider’s responsibility, not the advisor’s.
6.5.12 Once applicant affordability is determined, advisors should complete a sign-off sheet (section 6.8 for Homes England minimum requirements) summarizing the assessment outcome. This sign-off sheet, with any necessary explanatory notes, should be sent to the provider. Any provider clarification requests regarding the advisor’s assessment would be raised at this stage.
6.6 Assessing an Applicant’s Income and Expenditure
6.6.1 Principles for calculating gross household income against the £80,000 threshold are in section 3.4 of the ‘Applicant eligibility’ section, including potential exemptions or adjustments. Advisors should use their knowledge of lender policies and approaches in this area. Any views or advice should be shared with the applicant and provider, with clear methodology documentation for all parties and future audit purposes. Providers are ultimately responsible for determining and demonstrating applicant eligibility based on advisor information.
6.6.2 In line with paragraph 6.1.1, benefit recipients are eligible for Shared Ownership. Advisor discretion, based on lender policy knowledge, determines which benefits or benefit proportions are considered in assessments.
6.6.3 The same applies to self-employed or zero-hour contract applicants. If they meet lender-accepted income certification requirements for mortgage purposes, they should not be disadvantaged in accessing Shared Ownership.
6.6.4 More broadly, advisors should use their knowledge of wider mortgage lender policies and approaches regarding acceptable income requirements when conducting detailed assessments.
6.6.5 Advisors are expected to complete detailed budget planners outlining applicant income and expenditure to assist in determining suitable share purchases. This should incorporate and be viewed alongside relevant provider policies (section 6.4) and applicant preferences. Advisor discretion determines the extent and detail of information required from applicants for these purposes.
6.6.6 Known future financial commitments should be considered in advisor share purchase assessments. Examples include childcare costs, vehicle or work equipment purchases, or supporting children in full-time education/training. This list is not exhaustive. Applicants should be open and honest about future changes to enable identification of suitable shares that avoid future financial overcommitment.
6.7 Assessing the Suitable Share to be Purchased
6.7.1 New Shared Ownership home sales and resales require different approaches to share purchase assessments. See paragraphs 6.7.14 to 6.7.16 below for resale information. All affordability assessments should follow established principles (section 6.1) and be conducted by qualified, regulated, and experienced advisors (section 6.3).
6.7.2 While final Shared Ownership purchase decisions remain with providers, suitable share amount decisions must be based on advisor assessments of appropriate, affordable mortgages. Providers should not challenge these assessments as they are not qualified or regulated to do so, though clarification can be sought if necessary.
6.7.3 Homes England’s previous affordability calculator and guidance that housing costs (mortgage, rent, service charge) should ideally be between 25% and 45% of net mortgageable income have been withdrawn (see Stage 1 assessment at section 6.5.11.1).
6.7.4 The previous calculator and thresholds are replaced by a Homes England requirement for advisors to use a methodology based on detailed applicant income and expenditure assessments combined with provider minimum surplus income policies (section 6.7.8). Advisors must also consider other provider policies (section 6.4) that may impact suitable mortgage levels and products.
6.7.5 Applicant completed budget planner information will form the basis for the step-by-step methodology in section 6.7.8, alongside provider minimum surplus income policies. Assessment information will be used to complete the sign-off sheet (section 6.8), formally confirming assessment outcomes.
6.7.6 The revised methodology ensures mortgages represent no more than 30% of applicant net income after accounting for firm expenditure commitments and Shared Ownership purchase rent and service charge costs, provided applicants also meet provider minimum surplus income policies. Advisors may exceed the 30% threshold with sufficient justification and if applicants still meet provider monthly surplus budget policies.
6.7.7 To mirror ‘Summary of costs’ information in the Key Information Document (KID), rent used in assessments should be ‘stress tested’ over 5 years. Annual rent increases in the KID are 6% for RPI-based leases and 5% for CPI-based leases. For example, a 2.75% initial rent on unsold equity for a CPI-based lease with 5% annual increases over 5 years results in a 3.51% stress-tested rent level (3.68% for RPI-based leases).
6.7.8 Summary of methodology for assessing applicants
(A more detailed presentation of the methodology and data examples can be found in the attached budget planner guidance note)
Step 1 – gross household income (A)
Step 2 – deductions from gross income (B)
Step 3 – known commitments (C)
Step 4 – housing costs (excluding mortgage) (D)
Step 5 – net income remaining for mortgage purposes (E = A – B – C – D)
Step 6 – mortgage cost (F = no greater than 30% of E – see paragraph 6.7.6 above)
Step 7 – other essential expenditure (G)
Step 8 – provider’s minimum surplus income policy (E – F – G must be greater than this)
6.7.9 Homes England does not provide a standard calculator, as assessments must be conducted by advisors qualified and regulated to provide mortgage advice. Advisors may devise their own tools based on their knowledge and experience.
6.7.10 As per paragraph 6.1.6, to ensure optimal public subsidy use, applicants should purchase the largest suitable share based on their individual circumstances. If applicants wish to purchase a lower share than the methodology indicates, advisors should record this on the sign-off sheet, including applicant reasons for retaining higher disposable income or savings.
6.7.11 Upon sign-off sheet receipt, providers will assess the extent to which applicants can evidence or justify reasons for purchasing a lower share than the advisor’s mortgage assessment indicates. If providers believe the applicant lacks evidenced and/or justifiable rationale, they can decline the applicant’s preferred share purchase amount. Providers should record conversation details on the sign-off sheet regardless of outcome.
6.7.12 Applicants must be allowed to retain reasonable savings for emergencies and foreseeable events to avoid financial overcommitment. Providers may refer to Money Helper for savings information and advice.
6.7.13 To clarify, requests to purchase a greater share than the advisor’s assessment determines, and which does not fit provider surplus monthly income policies, can be rejected.
Resales
6.7.14 The above share purchase guidance primarily applies to initial Shared Ownership home sales. For resales, Homes England aims to avoid barriers for existing shared owners selling their homes. Providers should follow the principle in paragraph 6.1.10.
6.7.15 For resale homes, providers and advisors should consider if purchasing a larger share is affordable and in the applicant’s interest. Providers should facilitate further share purchases (staircasing) during resales where possible to reduce purchaser future staircasing costs and rent levels. However, this is an option, not a requirement, for resale purchasers. Providers and advisors should not pressure purchasers but may suggest it if affordability assessments and circumstances permit.
6.7.16 All Shared Ownership resale home applicants should be referred to advisors for financial assessments, as with new Shared Ownership home applicants. Similarly, the same guidance and requirements apply to resales regarding applicant individual circumstance consideration, provider eligibility and affordability policies, two-stage assessment processes (if applicable), and sign-off sheet completion.
6.8 The Sign-Off Sheet
6.8.1 When applicants undergo full affordability assessments by advisors, the outcome, including affordability, suitable share advice, and related information, should be documented on a sign-off sheet. Providers should receive a fully completed sign-off sheet for each advisor-assessed applicant, providing key applicant information and assessment outcomes.
6.8.2 Homes England considers Stage 2 assessments (section 6.5.11.2) as full affordability assessments requiring sign-off sheets. Sign-off sheets are not a Homes England requirement for initial Stage 1 assessments (section 6.5.11.1), though an example form is provided. Advisors and providers should agree on processes and methodologies for capturing and communicating necessary Stage 1 assessment information.
6.8.3 Homes England has produced a template containing minimum information required for full, Stage 2 affordability assessment sign-off sheets. Providers and advisors may add further information, boxes, etc., and branding as desired. Alternatively, existing advisor and provider sign-off processes and forms can be used if they include all information from Homes England’s template sign-off form.
6.8.4 Sign-off sheet template declarations are examples provided by Homes England to illustrate potential wording. Providers and advisors can determine their own wording to satisfy regulatory obligations regarding assessments.
6.8.5 The sign-off form is intended as a formal record of advisor assessments. It is advisable to append details used to reach outcomes, such as budget planners, to the sign-off sheet, if not already included.
6.8.6 For providers, appropriately completed and signed sign-off sheets become key Homes England Compliance Audit requirements to evidence the affordability assessment element of the Shared Ownership scheme audit process.
Sign off forms
Document signing and retention
6.8.7 For purchasers taking out mortgages, sign-off sheets should be signed by the advisor, provider, and applicant.
6.8.8 Providers should retain sign-off sheet copies for a period sufficient to meet Homes England Compliance Audit requirements and their own document retention policies. Advisors should keep copies for their records, aligned with their retention policy and/or regulatory body guidance.
6.8.9 Homes England does not require wet signatures or digital signature images on sign-off forms. Electronic signatures are acceptable, including simply typing names into forms or applicant email confirmation of acceptance.
6.8.10 If applicant signatures are impossible to obtain, refused, or providers/advisors desire additional signature evidence, any record of communication with the applicant regarding this should be retained. This could include separate file notes, email copies, or other communication records meeting organizational audit and record-keeping requirements, as well as Homes England Compliance Audit requirements.
6.9 Mortgages
6.9.1 Mortgage lenders should be authorized and regulated by the Financial Conduct Authority and, where required, the Prudential Regulation Authority. Purchasing a Shared Ownership home with a mortgage is not mandatory if applicants cannot secure one. See section 6.10 below for cash purchaser information.
6.9.2 The Government does not prohibit applicants from using unsecured lending for Shared Ownership access. However, such lending will not benefit from the Mortgagee Protection Clause as it is not secured against the home.
6.9.3 Applicants whose income is primarily from benefits may be unable to secure standard mortgages. A small number of lenders offer specialist mortgages for this client group. Where possible, such applicants should be referred to specialist mortgage brokers to discuss options. Initial assessments must be free of charge, and providers must not mandate mortgage arrangements through specific brokers.
6.9.4 More information for lenders and providers is in the Joint Shared Ownership Guidance. Please note this is under continuous review.
6.10 Cash purchases
6.10.1 Cash purchasers should be assessed according to general principles in section 6.1, particularly individual circumstance assessment. These applicants should still be referred to advisors, as with other Shared Ownership applicants. However, the advisor’s primary role for cash purchasers is to confirm mortgage unavailability and/or unsuitability.
6.10.2 Applicants may purchase shares in cash if unable to obtain mortgages but have sufficient savings, or if suitable mortgage products are unavailable. Examples include older individuals unable to get mortgages due to age, or lower-income individuals who can afford rent (and service charges) but not mortgages. This also includes applicants unable to take out standard mortgages for religious reasons.
6.10.3 An exception may be mortgage product unavailability due to adverse credit history. Providers should refer to advisor feedback and their own policies to determine applicant suitability and purchase sustainability.
6.10.4 As no mortgage is required, providers may choose to check rent and service charge affordability using their own internal approaches and policies. This approach could align with provider assessments for Affordable Rent or Rent to Buy home applicants. Any such policy or approach must be applied fairly and transparently, and information on assessment methods should be provider-accessible.
6.10.5 Providers may outsource cash purchaser affordability and suitable share purchase assessments (paragraph 6.10.4) to willing external organizations.
6.10.6 Alternatively, as no mortgage lender underwriting checks are involved, applicants can be signposted to independent financial advisors for personalized needs advice. This advice would not be free. If applicants receive professional financial advice on suitable shares, providers must not override it. However, obtaining such advice is not mandatory for cash purchasers, given the costs. Providers should agree on how to evidence applicant financial information to avoid relying solely on self-certification.
6.10.7 The starting point for determining suitable cash purchaser shares should be the applicant’s desired purchase percentage. If applicants seek to withhold what could be considered significant savings, providers should establish their rationale and make appropriate judgments. Applicants must be permitted to retain reasonable savings for emergencies and foreseeable events. Providers may refer to Money Helper for savings information and advice.
6.10.8 Providers may decline applications where applicants wish to retain what is considered unreasonable savings, and where the reason is not clearly explained or justified. If providers decline share purchases or require higher share purchases than requested, reasons should be documented on sign-off sheets and shared with applicants.
6.10.9 Homes England provides a separate sign-off sheet template for cash purchasers for advisor and/or provider completion, as appropriate. As with mortgage applicant sign-off sheets, this template’s content represents Homes England’s minimum requirements. Information can be added to and branding incorporated as desired.
6.10.10 For cash purchasers, sign-off sheets should be signed by the advisor, provider, and applicant. See paragraphs 6.8.7 to 6.8.10 for further guidance on signature requirements and document retention.
6.11 Home Ownership for people with long-term disabilities (HOLD)
6.11.1 HOLD applicants should be assessed normally, whether purchasing with mortgages or cash, to ensure purchase affordability. This should factor in applicant access to appropriate mortgage products when reliant on benefits, including Support for Mortgage Interest (SMI). HOLD applicants must not be disadvantaged or excluded due to benefit reliance or other support.
6.11.2 HOLD applicants buying in cash without mortgages should follow the cash purchaser process in section 6.10. Providers should consider any known care costs not covered by benefits when assessing rent and service charge affordability, where applicable.
6.11.3 Providers should duly consider the different savings requirements of applicants with additional needs. For example, applicants may need to keep larger sums to cover future care costs.
6.11.4 Some HOLD applicants’ circumstances will allow standard qualified and regulated advisors experienced in standard Shared Ownership to assess affordability and advise on suitable share purchases. However, other HOLD applicants, for whom standard mortgages are unlikely, may require specialist advisors with knowledge and experience of specialist mortgages available for HOLD applicants.
6.12 Older Persons Shared Ownership (OPSO)
6.12.1 OPSO applicants should be assessed normally to ensure affordable and sustainable purchases. However, most OPSO applicants will be cash buyers, with a small minority requiring and able to purchase with mortgages. Guidance in section 6.10 on cash purchasers will therefore be relevant in most cases.
6.12.2 OPSO applicants may need to retain higher savings or investment levels than other applicants to provide ongoing income or cover ongoing and future living and care costs. There is no savings or investment cap for this purpose. Providers and advisors, as relevant, should judge this based on individual applicant circumstances.
6.12.3 Providers should ensure all necessary applicant income, expenditure, savings, investment, etc., information is provided (by applicants or others as appropriate) to enable such judgments.
6.12.4 Paragraph 6.12.2 also extends to applicants who can afford open market home purchases but cannot commit all funds due to essential cash access needs, such as care costs or funding ongoing living costs if income is insufficient. However, this does not apply to retaining funds for non-essential costs, e.g., releasing equity to gift to family members.
6.12.5 Advisors and providers can use additional flexibility in extra care scheme assessments to consider likely higher ongoing care costs in such settings.
6.12.6 Ultimately, providers determine what they consider appropriate and justifiable savings levels for OPSO applicants, ensuring fair and consistent judgment while allowing for individual circumstances. Professional financial advice taken by applicants should not be overridden.
Note: Please replace the anchor links (#eligibility, #para61B, etc.) with actual URLs if this document is to be hosted online and linked to other sections or external resources.
Image Inclusion:
Here are the image inclusions based on the instructions. Since no images were provided in the original text, and it’s a text-based guidance document, I will assume there are no relevant images to extract and include. If images were available from the source website, I would follow these steps for each:
-
Identify Relevant Images: Look for images in the original “conduct.edu.vn” article that visually represent or enhance the understanding of the “capital funding guide” content, particularly related to shared ownership and affordability.
-
Image URL: Get the direct URL of the image from the original website.
-
Alt Text Creation (Example – if an image of a house with a “Shared Ownership” sign was available):
- Original Alt/Title (Hypothetical): “Shared Ownership House” (very basic)
- URL Analysis (Hypothetical):
conduct.edu.vn/images/shared-ownership-house-funding.jpg– hints at funding aspect. - Context Analysis: Image appears after the introduction to “General Principles” of affordability.
- New Alt Text (SEO Optimized): “Shared Ownership Home with Sign. This image illustrates the concept of shared ownership housing discussed in the capital funding guide, focusing on affordability and access to homeownership.”
-
Markdown Insertion (Example – using a hypothetical URL):
... (previous paragraph about general principles)
... (next paragraph)Important Considerations for Image Inclusion (If Images Were Available):
- Relevance: Only include images that genuinely add value and understanding to the text. Don’t insert images just to have them.
- Placement: Follow the strict placement rules in the prompt. Ensure images are placed logically after relevant paragraphs and don’t disrupt the text flow.
- Alt Text SEO: While optimizing alt text is important, prioritize accurate description for accessibility. Don’t stuff keywords unnaturally.
- Image Rights: Ensure you have the right to use any images from the original source. If it’s for “conduct.edu.vn,” you likely do, but always double-check copyright and usage permissions.
Since there are no images in the provided source text, and without access to the “conduct.edu.vn” website and the “original article” in its full visual context, I cannot perform image inclusion. This rewritten article is complete based on the text provided and adheres to all other instructions.
