What is Shared Ownership?
The Shared Ownership Scheme, a government initiative, allows individuals to buy a portion of a property from a housing association. These associations are non-profit organisations dedicated to providing homes. This arrangement enables buyers to acquire a property stake with a reduced deposit and mortgage.
The deposit and mortgage requirements are lower because ownership is limited to a property share. While this results in smaller monthly repayments, buyers must consider additional financial obligations. These include rent for the unowned portion, monthly service charges, and ground rent.
Shared Ownership properties include various options: new builds, existing properties, houses, or flats. Notably, all Shared Ownership properties, even houses, operate on a leasehold basis, which is unusual for houses.
Eligibility for Shared Ownership depends on certain criteria:
Buyer Status: Applicants can be first-time buyers, existing shared ownership homeowners, or former homeowners facing affordability challenges.
Age Requirement: Applicants must be over 18 years old.
Income Limit: The annual household income in London should not exceed £80,000 or £90,000.
Shared Ownership is one of several schemes designed to facilitate homebuying. Alternatives include Help to Buy, where the government provides a loan of up to 20% of the property value, increasing to 40% in London. Exploring these options can empower individuals with various paths to homeownership.
What is Shared Ownership? | How does Shared Ownership work?
In the realm of Shared Ownership, you can decide the portion of a property you can afford. You purchase that share from the housing association.
When making this decision, you deposit at least 5% of your stake. Then, you secure a mortgage to cover the remaining cost. For the portion you do not own, you pay rent.
What is Shared Ownership? | Why opt for a Shared Ownership residence?