Guide to Shared Equity

Shared equity increases the purchasing power of people who wish to buy a new home. Additional money in the form of an equity loan is provided by Hafod, which when combined with a conventional mortgage enables people to purchase a suitable home.

What sort of home can I buy?

The home that you buy from Hafod will be brand new and usually built by a volume or private housebuilder as part of a larger private development. We have varied purchasing opportunities at any given time, however most of the time the properties will be flats. Check out our Property For Sale section to see what's available in the area in which you want to live.

How does shared equity work?

The equity loan from Hafod is based on the value of the property you wish to buy and calculated as a percentage. A 30% loan is traditionally available although this does vary from time to time.

For example, if you wished to buy a property that was valued at £140,000, a 30% equity loan would be worth £42,000. You would need to raise the remaining 70% balance of £98,000 yourself via a conventional mortgage and any savings you may have.

Once you have purchased, the equity loan will be secured on your property as a Charge in favour of Hafod. Our Charge will be ranked as Second and immediately beghind your first(conventional) mortgage if you have one. Y9ou will never have to pay any monthly rent or interest on Hafod's Charge, however you will need to give Hafod a percentage share in any increase in your property's value when you want to repay the Charge.

When do I have to repay?

You can repay the Charge at any time, but you only have to repay it when you sell the property on in the future. The repayment can only be made in one lump sum, i.e. you cannot pay it back in instalments or make monthly payments.

How much will I have to repay?

The amount you repay is linked to the value of your property at the time of repayment. In order to establish your property's value you will have to pay for an independent valuation to be carried out by a RIC's qualified surveyor. Once the value of your home is agreed you will then need to repay the relevant percentage (usually 30%) of that figure to Hafod.

For example, lets say that you purchased a property from Hafod for £100,000 and you received £30,000 toward the price which is equal to 30% of the purchase price. If you wanted to repay after 5 years and your property was valued at £115,000 you would need to repay to Hafod £34,500 which is 30% of the new value.

Further information concerning can be found by accessing our booklet - Homebuy - A Guide for first time buyers, by clicking HERE

You can also access guidance by clicking HERE.  This booklet is the Welsh Governments guidance on Homebuy.


If you would like a more detailed discussion on shared equity please feel free to contact us at homeownership@hafod.org.uk or telephone 02920 675800.

Guide to Shared Equity
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