Shared ownership is another way to buy your own home. You buy a percentage, and pay rent on the rest. The housing association owns part of it — but you’re living there, you decorate it, and you decide when to sell.
Buying a percentage means a smaller deposit and smaller mortgage. It’s a sooner first step on the ladder for lots of people. Usually, you can also carry on buying shares, to own it 100%.
Black Prince Road
A one bedroom fifth floor flat is now for sale in London Borough of Lambeth, available to buy through Shared Ownership. Full market value £550,000 with a 35% share available at £192,500.
Monthly Rent: £819.59
Other Service Charge**: £193.87
Management Fee: £13.50
Council Tax: £128.08
Estimated Total (per month): £1,940.42
** Service Charge payable to Resident Management Company
The monthly mortgage is based on an interest rate of 3.89% with a capital and interest repayment over 25 years. It is based on a 90% mortgage The rent may increase each year, the increase calculation will be specified in the lease.
Fifth floor flat
Entrance hall, kitchen/reception, bedroom, bathroom with WC
There are no external facilities
60 square metres as per RICS valuation
F – General access
Length of lease
Min share price from: £189,000 for a 30% share
Full price from: £630,000
Monthly rent from: £771
There is only one available priced at £189,000 for a 30% share.
It’s the same as buying on the open-market but you’re buying a share of a property, so therefore pay a mortgage on the part you own.
An independent mortgage advisor can help suggest which type of mortgage might be best for you, based on your situation.
Leasehold, which is essentially the contract for the share you've bought.
It means you've got the right to keep your home for a certain number of years (usually at least 125), but the land belongs to someone else. Your lease also sets out how much you need to pay each month, your responsibilities while living there and all the details of your agreement with the housing association. Make sure you go through it and ask lots of questions.
Your solicitor can help you with this.