What Are The Pros And Cons For Shared Ownership?

What Are The Pros Of Shared Ownership?

There are many benefits of Shared Ownership and a lot of them come from the fact that they are usually new builds. This means that they require very little maintenance or work. If a home is still being built, you may also be able to choose your own kitchen and bathroom suites as well as fixtures and fittings.

This is a benefit as  you do not have to buy these separately or replace them like you would an older house.  If you are the first person to live in this home, the property may have a warranty . You should check this with the housing association to see what cover you have for the house and what it includes.

Shared Ownership is seen as an affordable way to get on the housing ladder. One benefit is that you do not need to have saved a big deposit,  you only need to put a deposit down for the % of share that  you are buying.

For example, if you are buying a 25% share of a £140,000 property, you would only need to pay a deposit for £35,000 of the property. This means that you would only need £3,500 for a 10% deposit.

You can buy more shares in your property, meaning you own more of it. This is known as ‘staircasing’ and can be done if your income increases or you have saved more money. There will be costs associated with this which our outlined in our piece about shared ownership.

Don’t forget that as with any property purchase, shared ownership is an investment. So if the value of your property increases so does your share. Of course this works the other way around too.

What Are The Cons Of Shared Ownership?

As with most things, there are of course negative points to buying a shared ownership home.

For example, you may find it frustrating that you are still paying rent. Most shared ownership properties are leasehold, meaning the land belongs to someone else, usually the housing association.

If you staircase and buy more shares in your property you may eventually be able to buy it outright. You may be able to buy the leasehold too. You should check with your housing association.

The property is owned jointly by you and the housing association and you can decorate your home as you wish. However, you will still need to seek permission for any structural changes.

When it comes to selling your shared ownership home, unless you have bought the house outright, you cannot sell the property on the open market. Housing Associations have 8 weeks to find a buyer for you. If after this time, the property is not sold, you can then advertise your home with an estate agent.

Shared Ownership Pros And Cons, Should I Go For It?

Shared ownership works differently to buying a property on the open market. However it can be an affordable way to get on the property ladder. This is because the required deposit is smaller so you don’t need as much cash up front to get a shared ownership mortgage.

Although you still need to pay rent to the housing association who part own the property. Shared ownership owners often comment that their combined monthly payments are still cheaper than the rent they were paying previously.