We love shared ownership and you should too as it gives you the opportunity to get your first steps on the property ladder. So if you are a first time buyer it is a great opportunity to get the keys to your first home.
Like everything it is important that you understand what shared ownership is. If you have googled the term shared ownership there will be a mix of positive and negative pieces for you to review. However, if you (a person or household) earn less than £80,000 per year (it is £90,000) if you live in London you should give serious consideration to shared ownership, or part buy part rent as it is sometimes called.
A smaller deposit is required for shared ownership property
If you do your numbers and can afford to buy your first home outright, that is great. However, the key will be whether you can raise the deposit required for your starter home. With a shared ownership deposit will only be required for the share that you are buying. Typically, you can purchase between 25% and 75% of a property with the remainder being rented from the housing association who is selling the home.
Subsidised rent and leasehold costs
It is also important to point out that these shared ownership homes are leasehold. What this means you will pay a service charge monthly to cover this cost. If it is not clear to you what this amount is please check with the housing association who is selling the home you are interest in. Also, you will need to be mindful that this can rise in future years, so it is worthwhile asking to see if they have any projected increases to share with you. Likewise you will pay a subsidised rent on the remaining share to the housing association.
If you need to find out more about shared ownership leasehold, there are some helpful sites available online, such as The Leasehold Advisory Service.
Staircasing options for shared ownership
If you are considering a shared ownership property, it may be that you are looking at some point to buy a greater share of your home or even looking to own it 100% outright. There are some properties where you may not be able to do this. So do ask the housing association to confirm what the staircasing options are. Obviously there are charges associated with this, such as getting surveyors out to revalue your home.
Not all shared ownership properties are new build
Not all shared ownership properties are new build. There are those being advertised as shared ownership resales. These are homes being sold by people who are looking to move out of their current shared ownership home. The criteria for shared ownership new build homes may be more specific in that those who have a local connection to the location will be considered first. Whereas with resales it tends to be a bit more relaxed. However, this will depend on the housing association who owns the leasehold.
We love shared ownership as you can get on the property ladder quicker
Yes, there are pros and cons to this tenure. However, if you do your research you will see that this is a great opportunity to get the keys to a home you part own before you thought it was possible to do so!
