Is Shared ownership right for me?
As the price of property has risen over the years, many people have had to look for creative ways to finance home ownership. One industry that has gained traction in recent years is shared ownership, aka part buy, part rent.
In this article G Williams will discuss the pros and cons for shared ownership.
The idea of shared ownership is simple. Rather than purchasing a property outright, you buy a share of it – usually 25%, but potentially up to 75%. The remaining percentage of the property belongs to the housing developer, to who you will pay rent.
Shared ownership is designed for first-time buyers or people that cannot afford a home in the open property market.
With you only needing a mortgage for example 25% of a property, The bank is more likely to lend to someone on a lower income. This also means the deposit for the property will be less than for an outright purchase, making it more achievable.
As your financial circumstances change, you could potentially purchase larger shares of the property, eventually culminating in 100% and outright ownership.
There are certain restrictions on eligibility. For example, you will be unable to apply for shared ownership if your household income exceeds £80,000 PA (£90,000 in London).
Selling may also be difficult, If you purchase a share in a property, it is likely to be a brand new build. A potential buyer will no longer be moving into a new, untouched home. They will be second occupants. In addition, not everybody will be interested in just owning a share of a property.
There may also be restrictions on home improvements. Of course, you will be perfectly entitled to decorate a shared ownership home, however you do not own the property outright, however. This means that any major works, such as structural changes, must be approved by the property developer.
When looking into shared ownership it is best to weight up the pros and cons of this housing option and discuss it with a professional. You may find that shared ownership is the ideal way to begin an ascent up the property ladder.
If you are a first time buyer or moving into a shared ownership property and need a removal services. Feel free to get in touch for a no obligation quote.