Affordable Home Ownership While Serving: Northern Ireland

Co-Ownership and the things you need to know when buying while serving

Affordable home ownership schemes can make it possible to buy a home that you may not otherwise be able to afford on your current income. For serving personnel looking at affordable ways to buy a home in Northern Ireland, Co-Ownership is the main scheme to consider. Co-Ownership is a not-for-profit housing association and Northern Ireland's only shared ownership provider. It allows you to buy part of a property while Co-Ownership buys the rest, and you pay rent on the part they own. This guide explains how the scheme works, who can use it and the things you need to know before deciding whether it could be right for you.

Forces Help to Buy can be used with Co-Ownership, although you will need a mortgage lender that accepts the combination. You will also need to make sure your military pay and allowances are presented correctly, and if you're posted elsewhere after buying, you'll need to understand what that means for your home. We cover each of these points below.

01: Co-Ownership

With Co-Ownership, you buy and own part of the property. Co-Ownership, as your landlord, owns the rest and you pay rent on the part they own.

How does it work?

You can initially buy between 50% and 90% of the property. You use a mortgage, your own savings or a combination of the two to buy your part. Your landlord owns the rest and you pay rent on that part.

It is important to look at your mortgage and rent together when working out what you can afford. An Armed Forces mortgage adviser can help you find a lender that accepts the scheme and understands your military income, allowances and deductions.

You can buy more of the property later by increasing your share. The more you own, the less rent you pay to your landlord. You can continue buying additional shares until you own the whole property.

What homes can you buy?

Most ordinary homes in Northern Ireland can be bought through the scheme. This includes new-build and existing houses, bungalows, flats, apartments and maisonettes. You are not restricted to properties specifically advertised for Co-Ownership, although some new-build homes are reserved for buyers using the scheme.

The property must be suitable to live in as your home and be in acceptable condition. Co-Ownership will not buy certain types of property, such as mobile homes or properties that need significant work. New-build homes must also have a suitable 10-year structural warranty.

How much the property can cost depends on your Co-Ownership approval. Existing homes cannot cost more than £215,000. New-build homes can cost up to £230,000, but only where your individual approval allows you to buy above £215,000. Your approval may set a lower maximum based on what you can afford.

Who can apply?

You must be at least 18, live in Northern Ireland and have the right to reside there. You must be able to afford your share of the home and the rent on the landlord's share, but Co-Ownership will not support your application if it assesses that you could afford to buy the home without its help.

You cannot apply if you currently own, or part own, another property or land anywhere. If you have more than £13,000 in savings, the amount above £13,000 must be put towards your deposit.

If you're married, in a civil partnership, engaged, living together or planning to live together in your new home, you must apply together. Co-Ownership will assess your income and regular outgoings to decide what you can afford.

What does being in the Armed Forces mean?

Unlike Shared Ownership in England, Co-Ownership does not give serving members of the Armed Forces priority over other buyers, so you apply under the same rules as everyone else.

You will still need to make sure your military pay and allowances are presented correctly. An Armed Forces specialist can help with this and find a lender that accepts the scheme. If you're posted elsewhere after buying, there are also rules around whether you can rent out the property, which we explain later in the guide.

How do you apply?

You don't need to find a property before you apply. You can start by using Co-Ownership's online checker and then apply directly to Co-Ownership. If you need help with the application, a good mortgage adviser can complete and submit it for you.

Co-Ownership will assess how much you can afford and, if your application is approved, tell you the maximum property value you can look for. You can then start looking for a suitable home within that amount.

What deposit will you need?

You may be able to buy through Co-Ownership without a deposit at all. Whether you need one, and how much, will depend on the mortgage lender you use. A mortgage adviser can help you find a lender that works for you.

Can you use Forces Help to Buy?

Forces Help to Buy can be used with Co-Ownership, but you will need a mortgage lender that accepts the combination. The FHTB advance can be used towards your deposit, and the monthly repayment will be taken into account when working out what you can afford.

An Armed Forces mortgage adviser can help you find a suitable lender and work out how the FHTB repayment will affect what you can afford to borrow. Your mortgage lender will also need evidence of your Forces Help to Buy advance. This can include your Personal Information Note (PIN) from the MOD, which confirms the amount and terms of your FHTB advance.

What happens after you buy?

You can buy more of your home at any time, usually in 5% steps or larger amounts. The more you own, the less rent you pay to your landlord. You don't have to increase your share, but if you eventually buy the remaining share you will own the whole property and will no longer pay rent.

If you need to borrow more to increase your share, this could mean borrowing more from your existing mortgage lender or remortgaging to a different lender. A mortgage adviser can help you look at the options available to you.

If you decide to move, you can sell your home at any time without first buying your landlord's remaining share. The money from the sale is divided between you and your landlord based on the share of the property you each own.

What happens if you're posted elsewhere?

Unlike Shared Ownership in England, there is no published Armed Forces concession allowing you to rent out the property if you're posted elsewhere.

Your home must remain your main residence. You can have a lodger while you live there, but you cannot rent out the whole property without permission from your landlord. If you're posted away temporarily, you should contact your landlord before making any arrangements and explain your circumstances. You will also need to check the position with your mortgage lender.

Still have a question?

Affordable home ownership schemes can be complicated, particularly when military life is involved. If there's something we haven't covered, you can ask us at pflmortgages.com/ask.

For more Armed Forces help and advice visit pflmortgages.com/armed-forces