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5 reasons to love Shared Ownership

Posted 15 September 2016   |   By Jonny Brown

Purchasing a share of a newly built home or through a re-sale programme (for example you can purchase 50% of the market value) has never been more affordable. 

 

Shared Ownership is a great way to helping get a foot on the housing ladder without the usual high costs associated with buying a home. A high number of these properties are also new build properties, helping you afford a brand new home at a reduced rate.

 

Below our 5 of the main reasons why Shared Ownership could work for you, like it has for many of our customers already.

 

  • 1 - It’s affordable

    Buying with Shared Ownership means you’ll need less of a deposit - as you only need a deposit for the share you buy – which can be as little as 5% of the share you are purchasing. You’ll also need a smaller mortgage, as you are only buying a percentage of the property to begin with.

    Take this example:

    House price: £120,000

    50% Share Price = £60,000

    Mortgage & Deposit = £60,000 (Deposit £3,000)

    Rent Payable = £126.92 per month

    So you could buy 50% of a home with a 5% deposit of just £3,000 and pay a reduced rent of just £126.92 per month.

    If we take the same example buying on the open market, you would need a deposit of between £12,000 and £18,000 meaning you would potentially be saving 3 times longer! So it makes sense to buy what you can afford now, and work towards owning more down the line.

  • 2 - It’s accessible

    The Government recently relaxed the criteria for Shared Ownership to make it accessible to more people. You can now access the scheme if you’re a first-time buyer earning less than £80,000 a year. Existing Shared Owners can also now benefit by being able to move from one Shared Ownership home to another, and members of the armed forces receive priority.

    It’s not just for younger buyers either – there is a part of the scheme that is specifically for those aged over 55. Older Person’s Shared Ownership or OPSO is for older people who may be looking to downsize as their current home is too big for them, or has become unsuitable for their needs.

    It works in the same way as the general Shared Ownership scheme, but the maximum share available is 75%. Once you own 75% you won’t have to pay any rent on the remaining share.

  • 3 - It’s available on a range of homes

    If you want to buy a new build Shared Ownership property you will need to look for a new development offering the scheme. However, there are also homes which have been bought through Shared Ownership in the past that are also available - known as Shared Ownership Resales. These are properties that the existing Shared Owner is now looking to sell and move on from. So, if you’re after a home in a more established community this could be the route for you.

  • 4 - It’s easy to buy more shares

    As a Shared Owner you have the option to buy more shares in your home, known as Staircasing, and you can do this at any time from when you buy the property

    This will be a very similar process to when you bought your first share and you will need to liaise with your Housing Association and Solicitor. When you staircase the amount of rent that you pay on the unsold share will reduce accordingly.

  • 5 - It’s easy to sell your home

    As a first time buyer, your first home is unlikely to be your last, however now that you are on the property ladder, buying your next home should hopefully be easy– and selling your Shared Ownership home will be too!

    The Housing Association who owns the remaining share on your home may even be able to nominate someone to buy your home, meaning you might not even have to find a buyer yourself. If they can’t nominate someone, you are free to sell your home on the open market.

    The person who buys your home will also be a new Shared Owner, so you’ll also have the good feeling of knowing your first home is helping someone else onto the property ladder.

    So that’s why we love Shared Ownership – affordable, accessible, available on a range of homes, easy to staircase and easy to sell when the time comes – what’s not to love?

 

For more information on Shared Ownership, visit our page here.

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Page last reviewed 11/07/2017