Costs in the shared ownership process
You should generally have a minimum of £5000 savings to cover the cost of buying (depending on the value of your home).
Deposit and reservation fees
- Reservation fee: £200
- Deposit fee: £300
The reservation fee is the amount you pay to reserve your home. This is deducted from the price you purchase your house at. The reservation feed is paid to the sales team when you view the house.
The housing provider requests a deposit when you exchange contracts. Like the reservation fee, the deposit is taken off the price of your home.
Mortgage valuation fee
- Around £400 to £500
Your mortgage lender will arrange a valuation of your home to check that it's worth the price you are paying for it. This fee is requested when you apply for your mortgage.
Mortgage arrangement fees
- Between £400 to £1,500
For fixed rate mortgage there is usually an 'arrangement' or 'application fee'. The longer the interest rate is fixed for, the more more expensive the fee will be. These fees are not refundable, so if you pull out later you may lose this money. Your lender will advise when the fee is payable.
- Between £700 and £1,000
Fees include land registry fees, local search fees, and other expenses. You will pay these fees upon completion of the sale.
Stamp Duty Land Tax (SDLT)
- 1% of the full market value, or
- 1% of the share you buy, plus a proportion of the annual rent.
This is a government tax when buying a home. You must check the stamp duty thresholds when buying a home as these can change. Your solicitor will advise on the exact cost. You pay the SDLT to your solicitor upon completion.
- £150 to £500
If you are going to use a removal company to move your furniture, it is recommended that you two to three quotes as costs can vary enormously. You typically pay the day you move.