Who is Shared Ownership for?
If you’re a first time buyer looking to get on the housing ladder, you’ve probably heard of something called Shared Ownership.
How does Shared Ownership work?
Firstly, Shared Ownership doesn’t mean you will be sharing your living space with someone else! With Shared Ownership, you initially purchase a share in the property (between 25% - 75%). You will pay rent to the housing provider on the remaining share. Therefore, your monthly costs will cover the mortgage on your share, your rent on the remaining share and a service charge (if applicable). Don’t worry, the good news is that a combination of these costs often works out cheaper than buying outright on the open market and even renting privately.
How does Shared Ownership help first-time buyers?
Shared Ownership makes it much easier to get a deposit together than if you’re saving to buy outright. Often you’ll be required to pay as little as a 5% deposit on the share that you’re buying, this is usually set at 25-35% minimum share. So, if you are buying a 25% share of a property worth £400,000, you’d need a deposit of just £5,000.
Will you ever fully own the property?
Over time, if you can afford to, you can purchase extra shares through a process known as ‘staircasing’. In most cases, you will be able to staircase all the way to 100% full ownership – meaning you will no longer be paying anything towards rent.
Who is eligible for Shared Ownership?
You may be eligible for Shared Ownership if you meet the following criteria:
Your household income is no more than £80,000 p/a, or if you are in London then the maximum household income is £90,000 p/a
You are unable to purchase a suitable home to meet your housing needs on the open market
You do not already own a home or you will have sold your current home before you purchase a shared ownership property.
For more information on Shared Ownership and to search for properties visit www.sharetobuy.com