A Shared ownership property offers you the chance to purchase a share of a property rather than the full 100%. Shares purchased are usually between 25% and 75% as a way of getting on to the property ladder when buying outright isn’t possible.
Typically a housing association owns the remaining share in the property and you pay an annual rent to the association on the share of the property that you don’t own. Therefore the larger your share in the property is, the lower your rent will be. You will also have to pay any mortgage (if required) on the share you own as well as any service charge for apartments.
What are the main benefits of shared ownership?
- It helps people who can’t afford to buy an entire home to get on the property ladder
- If you need a 5% deposit, this would be 5% of the share you are buying, not the full value of the home. So saving for a deposit is easier
- You are not restricted by the usual rental conditions. For example, you should be able to decorate the property the way you want
- Buyers are given the option to buy the remaining shares and increase ownership until they are the sole owners.
Who is eligible for shared ownership?
The scheme is primarily aimed at first-time buyers. But, this isn’t always the case. You might be eligible for shared ownership if:
- Your annual household income is below £80,000 if you live outside of London, and £90,000 within London
- You are over 18 years of age
- You are a first-time buyer. Or a buyer who previously owned a home but is now unable to purchase again (e.g. you cannot afford to)
- You rent a council or housing association property
- You are not in mortgage or rent arrears and have a good credit history.
What are the disadvantages of shared ownership?
- Unlike renting, you may need to pay stamp duty, home insurance and maintenance fees
- You cannot buy a freehold shared ownership property as all shared ownership homes are leasehold. This should not put you off, but there are additional considerations which we will advise you of.
- Some lenders do not offer mortgages to people entering into a shared ownership scheme and you may not have access to the best rates.
- Often, if you want to sell your home, the housing association has the right to buy it, or find another buyer before you can market it yourself.
At evolve we specalise in advising clients on shared ownership homes and have helped many clients buy and sell in this way. If you’re ready to purchase or sell a shared ownership home, contact one of our expert team on 01908 018390 or firstname.lastname@example.org