Frequently Asked Questions
Pathways is part of Lloyds Banking Group and supports people into a home of their own through shared ownership, allowing them to buy a share of their home while paying rent on the remainder.
Shared ownership is an initiative designed to help people find a place they can call home when buying a home outright feels out of reach. You buy a share of your property – with a deposit and a mortgage if required, and you only need to pay for the part you’re buying. Pathways keeps the remaining share and you pay rent on that portion. You can live in your home for as long as it suits you. If your finances allow, you can buy more shares over time but there is no pressure or obligation to do so.
There are eligibility criteria you’ll need to meet to buy a shared ownership home. Our sales team can guide you through the requirements, and full details are available in our Allocations Policy.
You’ll need to be able to cover the ongoing costs of owning a home. There are also household income limits: up to £80,000 per year outside London and £90,000 per year in London.
No. Your home will be yours to live in for as long as you like, or for as long as it fits your needs. You can decorate it and fit it out to your own taste and style. Pathways will sell you a share (equity interest) of the home e.g. 40%. You will only need a deposit and mortgage (if required) for the share you are buying. Pathways will own the remaining share, and you will pay a rent for this.
The rules for shared ownership don’t allow any form of subletting. We understand there may be reasons why you may need to be away from your home and want to sublet. In some exceptional circumstances we are able to grant permission for you to sublet on a temporary basis. You must get our consent before you sublet. You can find more information in our Shared Ownership Policy. We are able to be more flexible with regard to taking in a lodger but you must get our consent beforehand.
You don’t have to be a UK citizen, but you do need the right to live in the UK permanently.
You can choose any size of home provided its affordable based on your financial assessment.
If you live in a house, you do not need permission to have a normal domesticated pet or pets, e.g. cat or dog, fish or small bird. This extends to more exotic commonly kept pets too like snakes or lizards but please speak to us first. We will not allow you to keep any farm animals or wild or dangerous animals. Please see our Pet Policy for more information. It’s important that you make sure your pets are well cared for and aren’t a nuisance to your neighbour, this could be a breach of your lease.
If you live in a flat then permission might be needed and must be sought before you buy your home. We may not be able to agree to you keeping a pet in a flat especially where Pathways is not the owner of the building. Please check before getting a pet.
The buying process
In addition to your deposit, you’ll need funds to cover the fees and costs involved in buying a home (see “Are there any fees/costs when buying?”).
You may also want to budget for moving-in costs such as removals, contents insurance, postal redirection or new furniture.
Pathways charges only one fee during the initial buying process: an engrossment fee of approximately £150 (£180 including VAT).
There are other costs associated with buying, including legal fees, mortgage arrangement fee (if applicable), mortgage valuation fee (if applicable), mortgage product fee (if applicable) and Stamp Duty. There may be other costs depending on what other services you may choose.
As a Shared Owner, you’ll be responsible for all usual homeownership costs, including utilities and council tax. You will also need to pay your mortgage, service charge and Shared Ownership rent (plus a small management fee).
From time to time, you may need to pay an administration fee if you request something not included within the management fee (e.g., permission for significant alterations).
While you are a Shared Owner, Pathways provides buildings insurance and passes the premium on to you. You will need your own home contents insurance.
Pathways provides buildings insurance while you are a Shared Owner and recovers the cost from you. When you own 100%, you will be responsible for arranging your own buildings insurance. Contents insurance must always be arranged by you.
The initial rent you will be charged on the share Pathways retains will be a percentage of the value of the home. Pathways are currently using 2.75% to calculate the rent.
For example, if the retained share is worth £200,000, initial rent would be £5,500 per year (2.75%).
Pathways uses the government approved Shared Ownership lease. This means your rent is reviewed once a year and can increase in line with the Consumer Price Index (CPI), plus 1%.
Pathways will only be providing houses initially so the service charge will be for the upkeep and maintenance of the estates’ communal areas if these aren’t adopted by the local authority. The sort of things this will cover includes tending to any landscaped areas, play areas, keeping roads and paths clear of litter, street lighting and repairing any damage. It’s best practice to collect something for future works like resurfacing roads, so part of the service charge will be saved for things like this. You’ll have a full breakdown of your service charge at the beginning of the buying process. Pathways don’t make any profit from service charges, with the law requiring them to be set at a reasonable level. Service charges for the management of the estate will usually be the responsibly of the estates’ management company and will be collected by their agent. All of this will be explained at the beginning of the buying process.
Buying more or selling your home
Yes. When you are financially ready you can buy more equity in your home, this is known as ‘staircasing’. There are two routes open to you in the first 15 years:
- Gradual staircasing – limited to buying shares of 1% per year
- Standard staircasing – buying shares of 5% or more
Gradual staircasing provides a streamlined way of you buying an additional 1% share in your home each year for the first 15 years. This right falls away after the 15th year.
Standard staircasing will always be an option but is a bit more involved and will require a formal valuation of your home you’ll need to have a solicitor/conveyancer act for you. There are cost and fees with standard staircasing which will include at least, valuation fee and legal costs together with an admin fee charged by Pathways. We will help guide you through the process.
As you increase the share you own, Pathways’ share will reduce and so will the rent that we charge as it will be adjusted to reflect the new higher equity share that you own. There will be no rent to pay once you own 100%.
If you home is a house, once you have bought 100% you will acquire Pathways title. We expect all our houses will be held by us under a freehold title.
Our Staircasing guide will provide more information on staircasing.
Our guide to selling your home will provide more information
During the time you are a Shared Owner the lease of your home may set out some restriction to selling. Usually this is limited only to allowing Pathways to find a buyer for the share you own. This is usually limited to four weeks of you telling us you would like to sell. Very occasionally and usually only when your home is located in an area of special interest, who you sell to may be restricted, in the rare incidences when this is the case we will make sure you are aware of any specials circumstances when you are buying.
You are able to sell on the open market unless Pathways have been able to find you a buyer within four weeks of you letting us know you want to sell. There may in certain rare circumstances be restriction if your home is in a special area. If your home is in an area with special conditions we will make this clear to you when you are buying. An example of a special condition could be only selling to an approved buyer or selling your home back to Pathways.
Decorating, repairs and alterations
Yes, you are able to decorate your home internally to your own style and taste. You do not need to get Pathways consent or even tell us you want to decorate. We would however recommend against decorating in the first two years as new homes can take time to fully dry out. Some decorating materials can trap moisture and create confusion should defects arise and what caused them.
If you want to do something more substantial like build fitted wardrobes, you should let us know so we can make a record for when you want to staircase or sell your home.
Some improvements may add value to your home. It’s important we know what these improvement are so we aren’t benefiting from them when you staircase or sell your home.
In the same way as any other homeowner you are responsible for maintaining, repairing and generally keeping it in good order. If you have bought a new home, there will be warranties that may cover some things in what is often referred to as the ‘defects liability period’. There are two levels of warranty for your home itself, the first is for a period of up to two years and may cover things that might need repair sooner than expected. Then there is a longer warranty for up to 10 or in some cases 12 years. This longer warranty is limited to structural problems. As a Shared Owner you may also be able to appreciate this can sound confusing so we will give you more information at the beginning of the buying process.
Yes, you can make alterations to your Shared Ownership home, but like any other homeowner you will need to make sure you comply with all relevant building regulation and planning requirements. In addition, you will need to get Pathways consent for the alteration. This is important to avoid being in breach of your obligations and to make sure we are aware of what you have done for when you want to staircase or sell your home so only you benefit from any added value you have created.
Defects and Aftercare
Yes, new-build homes will come with warranties to cover defects and poor quality. There are generally two levels of cover, the first will be for a period of up to two years and will covered most poor quality works or things failing quicker than you would expect. The second level of cover is for up to ten years (sometimes up to 12) covering structural issues. There will also be warranties for things like appliances and installations, this could include things like dishwashers, boilers and windows. Its essential to follow the registration instruction for such warranties to make sure you are covered. We appreciate this can sound confusing so we will give you more information at the beginning of the buying process.
We take every care to make sure any defects are dealt with before you move in, but they can sneak through. Once you’ve moved in, it’s important to have a good look around and let us know immediately about anything that doesn’t look or work right. You can report them via our customer portal. We’ll make a note of them and let you know what will be done and by when. There may be some things which we will deal with straight away or quickly but there are others we will deal with at the end of the defect period. There may be some things which are considered minor, usually cosmetic which wont be considered as defects and we’d expect you to deal with them when you come to decorate.
Have a
question?
If you have a question about Pathways, take a look at our Pathways FAQs section. If you’d like to talk to a member of our team, email us at pathways@lloydsliving.co.uk or call us on 0345 030 6546 and let us know how we can help.