Everything you need to know about shared ownership
If your first thought when you hear the words shared ownership is having to share your home with someone, you’d be forgiven. Shared ownership is a scheme set up in conjunction with a whole host of housing associations, effectively offering prospective buyers the chance to buy a share of a property, whilst the housing associations owns the rest. Buyers are then given the option to increase ownership all the way up to the full 100 percent.
The benefits of shared ownership are plenty, it’s a fantastic alternative to renting and perfect if buying a house outright simply isn’t possible.
Aster Group outline the basic principles of the workings of shared ownership schemes, how they can be beneficial and who is eligible.
By purchasing between 25 – 75 percent of the property, as opposed to the entire property, the overall deposit can be lower. If you have significant savings, percentage purchased by the buyer can be bought outright, however you can also purchase these shares through a mortgage. The percentage owned by the housing association is then repaid through annual rent. The larger the share purchased by the buyer, the lower the rent.
To be considered eligible for the scheme, your yearly household income must be below 80,000 outside of London, and 90,000 within London itself. You must be a first-time buyer, or a buyer who previously owned a home but is now unable to purchase again.
In theory, you would only require a 5% deposit of the percentage you are purchasing as opposed to 5% of the entire property, therefore saving for a deposit such be much easier. You can also decorate the property however you want, with the usual rented restrictions being lifted. Most importantly, you’re given the chance to eventually buy out every share of your property, until you are the sole owners.
If you’re looking to get on the property ladder, and the thought of saving a huge house deposit is both daunting and not plausible, looking into shared ownership may just be for you.