Posted on: Thursday, August 4, 2022
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.
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.
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
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.
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.
Ready to search for your first home? The Guild are here to help. Our team of trustworthy professionals will guide you through the process whilst offering as much help and advice as possible.
We are required by law to conduct anti-money laundering checks on all those selling or buying a property. Whilst we retain responsibility for ensuring checks and any ongoing monitoring are carried out correctly, the initial checks are carried out on our behalf by Lifetime Legal who will contact you once you have agreed to instruct us in your sale or had an offer accepted on a property you wish to buy. The cost of these checks is £60 (incl. VAT), which covers the cost of obtaining relevant data and any manual checks and monitoring which might be required. This fee will need to be paid by you in advance of us publishing your property (in the case of a vendor) or issuing a memorandum of sale (in the case of a buyer), directly to Lifetime Legal, and is non-refundable. We will receive some of the fee taken by Lifetime Legal to compensate for its role in the provision of these checks.