Unlocking Homeownership Through Shared Ownership

Homeownership can seem daunting in today’s market. With rising property prices, the path to owning a home often appears inaccessible. However, there are options available for those looking to bridge the gap of affordability: Shared Ownership.

How Shared Ownership Works

Shared Ownership is a government backed scheme designed to facilitate homeownership among those who may not be able to afford to buy a property through getting a mortgage. The concept is simple, it allows individuals to purchase a share of a property—usually ranging from 25% to 75%—while paying rent on the remaining portion from a housing association or another relevant body.

The buyer pays a mortgage on the share they own and a subsidised rent on the share they don’t. Over time, owners can acquire greater shares of the property through a process known as ‘staircasing,’ providing the opportunity for full ownership.

Eligibility Criteria

In order to qualify for Shared Ownership, individuals generally must meet the following criteria:

• Be over the age of 18.

• Have a household income that does not exceed £80,000 (or £90,000 in London).

• Be a first time buyer, or a previous homeowner who can no longer afford to buy.

• Not own another property at the time you buy your shared ownership home. 

 

Additionally, priority is often given to local residents of the housing association, military personnel, or people living in council or housing association properties.

Benefits of Shared Ownership

There are numerous advantages to using Shared Ownership as a route to owning a home, including:

1. Affordability: With only a portion of the home to finance, deposits are typically lower compared to purchasing a house through a traditional mortgage.
2. Flexibility: The ability to staircase your ownership means you can increase your share at your own pace as your financial situation improves.
3. Reduced Costs: Monthly payments can often be cheaper than renting, with part of your expense acting as an investment.

Disadvantages of Shared Ownership

As with any property buying scheme, there are potential downsides to consider:

1. Limited Equity: Your potential for capital gain is tied to the percentage of the home you own.
2. Selling Can Be Challenging: You’ll likely have to give the housing association the chance to find a buyer before putting the property on the open market.
3. Restrictions: There may be restrictions on what you can do with the property, such as limitations on subletting or certain types of alterations.

With all this in mind, it’s essential to weigh up whether Shared Ownership aligns with your personal circumstances and long-term goals.

Taking the Next Step Toward Homeownership

If Shared Ownership intrigues you, the next step is reaching out for expert advice and beginning your journey. Speaking with financial advisors, housing associations, and research diligently to ensure you’re making an informed decision.

For those ready to take that first step, The Mortgage Society offers guidance and assistance throughout the entire Shared Ownership process. 

Contact us today to find out how we can help you unlock the door to your new home.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Approved by The Openwork Partnership on 27.08.2024

The Mortgage Society is a trading name of Just Mortgages Direct Limited which is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited, which is authorised and regulated by the Financial Conduct Authority.