One of the main aims of shared ownership is to enable more people to get on the property ladder. Noah’s Extra Rung scheme is designed to help you move up the ladder faster.
With Extra Rung, you get a 1% increase in your share of the home for each year you live in a Noah home – as long as you pay your rent on time, meet the terms of your lease and look after your home.
That Extra Rung increase is applied when you sell your share of the property. So, for example if you bought a 40% share of the home when you moved in, then lived for there for five years and fulfilled the conditions above, you’ll be entitled to sell a 45% share.
Extra Rung means that, by paying your rent on time and looking after your home, you can increase your share of the property’s value. That means you have a bigger deposit for when move on to your next house – so you can climb an extra rung on the ladder.
When you’re ready to sell your Noah shared ownership home, we have one requirement: you offer it to us first.
We do this, because we know it’s hard for people on lower incomes to afford high-quality homes in rural areas. Whenever we buy your share back, we can make the home available to the next generation of sharers – people who may be in the situation you are now.
For the same reason, we only allow owners to own up to a maximum of 80% of the home’s value.
Just before they married, Andy and Debbie bought a 40% share of a two-bed home for £100,000. The full (100%) open market value would have been £250,000.
They paid an initial rent – which rises in line with inflation each year – of circa £300 a month on the rest of the home’s value.
After five years, they are looking to start a family and wanted to find a bigger home. As they have met all the terms of their lease every year, they are entitled to an extra 5% share of their property value, thanks to Noah’s Extra Rung scheme.
That means their share is now 45%. So Andy and Debbie can sell their share via their estate agent, to a new eligible couple. Thanks to Extra Rung they will have more equity to invest in their next home – great news for the deposit on their new three-bed property!
If the market value of their home has gone up in that time, they may be able to sell their share for even more.
If the market value of their home has gone down in that time, Extra Rung can still help them by giving them a way to increase their future deposit.
Lorna and David had paid off their mortgage a while back. When they retired, they wanted a smaller property and to help their own children onto the housing ladder. So they decided to move out of the town to a bungalow, with a manageable garden, in a nearby village they’d always loved. They bought a 50% share for £160,000. The full (100%) open market value would have been £320,000.
They paid an initial rent – which rises in line with inflation each year – of circa £500 a month on the rest of the home’s value.
15 years later, David needs to go into a nursing home. As they have complied with all the terms and conditions of the lease, each year, they are eligible to receive a 15% increase in their share of the property value, thanks to Noah’s Extra Rung scheme. This means they can sell a 65% share of the property.
So Lorna and David can sell their share via their estate agent, to a new eligible couple. That will provide for David’s care costs and for a flat for Lorna close to the nursing home.
If the market value of their home has gone up in that time, they may be able to sell their share for even more.
If the market value of their home has gone down in that time, Extra Rung can still help them by giving them a way to increase their equity.
Important: risks you should consider before buying a home via shared ownership