What is shared ownership and is it for you?

The property market isn’t easy to navigate, particularly for first time buyers and those on a tight budget. If you’re considering purchasing a shared ownership property, read on to discover if it’s right for you.

How it works

Shared Ownership is a government scheme, offering first-time buyers and those who do not currently own a home opportunity to purchase a share in a new build or a resales property. Designed to help those with small deposits and incomes get onto the property ladder, the premise is to buy a stake and pay rent on the leftover amount. 

How to qualify

Criteria differs depending on the housing association, but generally to apply for shared ownership you must:

• Be 18 or over

• Not currently own a home

• Be unable to afford a suitable home

• Have a good credit score

• Earn £80,000 or less per year as a household

The Upside

If you opt for shared ownership, you will own a share of the property (typically between 25% and 75%) and a housing association will own the rest, which you will be charged for in rent at a rate much lower than market value. You can buy more of the property over time, but you only pay mortgage payments on your share, making the monthly cost significantly lower than a full ownership.

The Downside

Although there is the option to purchase more of the property over time, you can only add 10% each time, which is known as ‘staircasing’. In the time it would take to own 100% of your home, the house prices in your area could have increased, meaning you’ll have to pay more each time your house is valued. 

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