Getting on the property ladder is not easy and shared ownership provides an alternative for first-time buyers.
Shared Ownership offers you the opportunity to buy a share of your home with low monthly installment payments. This way, in time when finances improve or other circumstances shift, it makes it possible for people to purchase more shares.
In this guide, we will go through what shared ownership is exactly and how it could potentially be a better option for you.
What is Shared Ownership?
Shared Ownership gives first-time homeowners and those who don’t currently own a home the chance to invest in new builds or resales with an option of getting their share back at any time.
Purchasing a property can be expensive and not everyone has the necessary funds. However, some homeowners opt to get help from others through what is known as shared ownership or co-ownership mortgages.
A Shared Ownership purchase option is like a time-sharing plan. You buy shares in the home, and pay rent on what you don’t own. When able to do so, you can increase your share by buying more. Whether you are looking for property in Manchester, London, or wherever it may be, the cost of shared ownership can differentiate based on the market value in that particular city which is important to be aware of.
Are you eligible for a Shared Ownership home in the UK?
You can buy a home through shared ownership if your household earns £80,000 a year or less and you can’t afford the remortgage payments for a house that meets your needs.
According to gov.uk, one of the following must apply too if you are applying for a shared ownership property:
- You’re a first-time buyer.
- You used to own a home, but cannot afford to buy one now.
- You own a home and want to move but cannot afford a new home suitable for your needs.
- You’re forming a new household – for example, after a relationship breakdown.
- You’re an existing shared owner and want to move.
Can you ever fully own a shared ownership house?
For those who are unable to obtain a conventional mortgage, staircasing is an excellent way of gradually increasing their ownership stake in order to ultimately own 100% of property outright. For many people, this provides more stability and security than renting because they know that eventually, they will be paying off all debt with monthly interest payments rather than rent money.
How much income do you need for shared ownership?
When it comes to Shared Ownership, there is no set minimum income limit. The housing association will determine the threshold for an individual home and how they expect people under that maximum allowance to be able to afford to live in their properties.
Why buy a Shared Ownership home?
The Shared Ownership scheme is a fantastic opportunity for those on lower incomes who want to get onto the property ladder. With this, your monthly repayments can often work out cheaper than if you had an outright mortgage and there’s long-term stability without overstretching yourself financially.
Is a Shared Ownership home for you?
There are a number of pros and cons when it comes to shared ownership properties and it is important that you have done your due diligence when it comes to applying. Shared ownership is something that will necessarily work for everyone but it can be a great option for first-time buyers looking for a more financially comfortable way of getting on the property ladder. If you are interested in shared ownership, then you should seek the advice of shared ownership, or help to buy an advisor who will be able to give you all of the guidance that you need.