Posted by: Property Booking
22 May 2018
A government scheme which is helping thousands of first time buyers get onto that
first rung of the housing ladder, shared ownership is slowly making its way into our
everyday vocabulary. That’s because more and more would-be home owners are
opting for this far more affordable means of buying their own home.
This shouldn’t come as a surprise when you consider house prices are higher than
they have ever been while wages unfortunately haven’t kept up with inflation. Why
shared ownership is more affordable is because you don’t have to buy 100 per cent
of the property. Instead the buyer can choose to take out a mortgage on between 25
per cent and 75 per cent of the property. The remainder is paid in the form of a
subsidised rent to one of many housing associations offering the scheme. So what
are the other benefits of Shared Ownership? Well, here’s our top 5 right here:
Biggest benefits of Shared Ownership
1. You don’t have to find the standard 20 per cent minimum deposit. Instead you
can end up paying as little as £3000 to £5000 (although, obviously, the larger
the deposit, the less costly your mortgage will work out)
2. You may not entirely own the property, but the percentage you’re mortgaged
for is yours so you’re not entirely ‘throwing money away’ on someone else’s
3. Over the years, as you manage to accumulate more wealth you can buy more
of the property (a term the government refers to as ‘staircasing’ ie you can
increase your mortgage share and reduce the rent as time goes on so that
eventually you’ll own all the property outright.
4. You will no doubt find that it works out more economic to sign up to Shared
Ownership scheme than to rent a property (especially if you are looking for shared ownership in London or
other expensive areas in the South).
5. Just like if you’d taken out a traditional mortgage, you can sell your shared
ownership property whenever you like. And the good news is you will benefit
from equity since the property will probably have increased in value since you
originally purchased it.
It’s worth noting too that all properties - apartments or houses - available under
Shared Ownership are leasehold properties (meaning you’ll own the lease for 99
years or so).
The majority of these tend to be new build homes although some older and
previously lived-in properties do come under the Shared Ownership banner too from
time to time. In apartments you’ll usually be expected to pay a share of the general
maintenance of the building as well (and which is something else to be taken in to
account when working out whether or not you can afford a certain apartment).
Am I eligible for Shared Ownership?
If your household income is less than £80,000 (£90,000 for London) then you fit the
criteria for the scheme. And if you’re currently in the armed forces – or have been
discharged within the past two years - then you’ll get priority.
For a comprehensive guide to all things Shared Ownership, check out our handy guide - Shared Ownership Explained.
To ask a specific question about your application feel free to contact us, either via
the Contact Us page on our website or via or Twitter and Facebook. We look forward
to hearing from you!