Is Shared Ownership right for me?April 9, 2019 | Laura Whittle
Buying a house is both incredibly exciting and pretty intimidating. It’s expensive and while it’s great that the options for home ownership are increasing, how are you meant to know which is best for you? It’s hard enough deciding what to have for tea most nights.
If you’re looking to get onto the property ladder, one route to consider is Shared Ownership.
What is Shared Ownership?
The crux of Shared Ownership is exactly what it says on the tin. It allows you to buy a share / a percentage of a property – the actual amount being based on what you can afford. The housing association owns the rest.
This means you pay the mortgage on the share you own and a reduced rent on the rest. Depending on your mortgage lender, you’ll probably only need a five per cent deposit to get you started, which is pretty handy.
The process is quite simple. To start with, you buy between 25 per cent and 75 per cent of your home up-front. You then have the option to purchase more chunks of the property as and when you can afford higher mortgage repayments – which is known as staircasing. You can keep climbing those stairs until you own 100 percent, if that’s what you want.
Is Shared Ownership a good idea?
We may be biased, but we sure like to think so! The main benefit of a Shared Ownership scheme is that it’s usually more affordable than renting on the open market. Without a landlord breathing down your neck you’re also free to cover your walls in posters of ‘90s heartthrob James Van Der Beek or have a pet if you want.
You can also sell your home at any time and shared ownership is available on new build properties but also resales.
Is Shared Ownership worth it?
So let’s talk money – how much is Shared Ownership actually going to cost?
Let’s say you want to buy a £200,000 Onward Living property under Shared Ownership. You buy 50% of the full value of the property, because that’s what you can comfortably afford.
We would own the remaining 50%, which you would also pay a reduced rent on, worked out at 2.75% of the unsold equity.
You’d therefore need a small deposit, which would usually be 5% of the £100,000, and you’d arrange funds through a mortgage broker to cover the rest.
Another perk is that first-time buyers in Shared Ownership homes in England and Northern Ireland don’t have to pay stamp duty on the first £300,000 of any home that costs up to £500,000.
Who can apply?
You’ve got a good chance of qualifying for shared ownership if your household income is less than £80,000 per year and you are:
- A first-time buyer (or existing shared owner moving to another Shared Ownership home)
- A former homeowner buying again, perhaps after a relationship breakdown
- An older person who may already own your own home, but requires a more appropriate property to meet your needs
However, Shared Ownership is not a valid option for people who can afford to buy the property outright without Government assistance – so if this is you, you won’t be eligible.
If you’re a serving member of the British Armed Forces, or have been honourably discharged in the last two years, you’ll get priority for buying a home through Shared Ownership.
To find out more
Onward Living has homes available for shared ownership right across the North West, you can find a home here.
You can also apply online to check your eligibility at helptobuynw.org.uk under the shared ownership section. Certain terms and restrictions do apply.
To find out if you’re eligible for shared ownership, contact the Onward Living sales team for an informal chat on 0151 708 2421 or drop us an email at firstname.lastname@example.org.