Shooting Down the Myths Surrounding Shared Ownership

Shooting Down the Myths Surrounding Shared Ownership


  • Posted by: Property Booking

  • 04 May 2018

Shared ownership may have been the catalyst to help many first time buyers onto the housing ladder – but a large chunk of the public are still confused about what the term actually means.

‘Sharing’ finance – not living arrangements

The name Shared Ownership brings many to conclude it’s a way of owning a home while having to live with another individual. The reality couldn’t be further from the truth. The ‘shared’ aspect of Shared Ownership refers, of course, to how a home is financed, rather than lived in. In other words, it can be paid for via part-mortgage - usually between 25 to 75% - and part-subsidised rent.

The mortgage share of the property can then be increased over the years as a bigger share becomes more affordable (and which is known as ‘staircasing’).

Reducing the drudgery of saving for a huge deposit

This not only means that the monthly payments would prove affordable – but that the deposit would also be smaller since would-be buyers would no longer need to find that monumental 20% deposit or more of the property’s full value. This means the possibility of part homeownership has been opened up to thousands of more individuals and couples desperate to have a financial stake in their own property.

The gap in knowledge when it comes to Shared Ownership was highlighted in a recent YouGov survey, commissioned by development company Aster Group. A total of 2,111 individuals of various ages and economic groups took part in the poll. More than half (51%) were unaware that a Shared Mortgage could be accessed via traditional high street lenders such as banks and building societies.

Aster Group’s development & sales director Jane Gallifent conceded that one of the biggest hurdles to getting more would-be buyers to embrace the concept of Shared Ownership was the misunderstanding of what it actually was.

“We’re working hard to make sure alternatives like shared ownership are recognised as a key solution,” she said. “It brings more choice to the market and allows buyers to get their foot on the property ladder using a smaller deposit.”

Getting to grips with Shared Ownership jargon

While we’re in the mood for clearing things up, here are a few words and phrases related to Shared Ownership that you may find confusing. We hope our explanations help:

  • Leasehold – all shared ownership properties are leasehold. It means the land is owned by someone other than the property holder (most leases are for at least 99 years). Owning the land too would make you a freeholder.

  • Subject to contract – the sale of the property has been verbally agreed but it isn’t legally binding until it is down on paper (ie when the contract has been signed).

  • Service charge – all residents of a development are expected to contribute equally to pay for the maintenance of the hallway, building, lighting etc

  • Mortgage valuation – taken out by the lender, this report advises how much money should be given to the borrower for his or her property purchase. 

  • Staircasing - buying further shares in your shared ownership home is known as staircasing.

  • Section 106 Agreement - An agreement under the Town and Country Act 1990, usually between a developer and a local authority. 

  • Deeds – legal documents which relate to the property from the minute it was completed.

Property Booking offer an array of properties available for shared ownership across the UK. Check out our website or for all the latest Property Booking news be sure to follow us on Twitter and Facebook.

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