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Shared ownership is a government scheme that offers an easier alternative option for purchasing a home. It is ideal for buyers who would otherwise struggle to get onto the property ladder and cannot afford to purchase a property in the traditional way. Shared ownership involves owning a percentage share of the property, while the housing association or property development company owns the rest, which you pay rent on. You are able to purchase more of the property over time, either in full or with a mortgage. So, why are more and more buyers opting for shared ownership?
Get on the Property Ladder Faster:
If you are struggling to find a property within your price range that is suitable for you, shared ownership could be a good alternative. Getting a deposit together can often be the biggest roadblock for people who are hoping to buy a house for the first time or are currently renting. Since shared ownership homes require a lower deposit, they are usually easier to get your hands on if you’re in a tough financial situation and there are flexible options that are designed to suit you best.
Smaller Deposit:
Since the deposit is calculated from your percentage share rather than the full value of the house, the deposit on a shared ownership house is usually much smaller than what you would expect to pay if you were buying 100% of the property. Since getting the deposit together is often one of the biggest problems that first-time buyers face, this can make shared ownership an ideal option.
More Chance of Mortgage Acceptance:
If you are a low-income earner, getting a mortgage is not always easy. However, since the shared ownership mortgage will only cover borrowing the amount that you need to purchase your percentage share, you are more likely to get approved since you will be borrowing much less from the bank.
More Security:
Although you will own part and rent part of your house, you will have more security compared to traditional renting. In a shared ownership home, you are still classed as the owner of the property and therefore will not have to deal with issues such as the landlord raising your rent or selling your home suddenly. As long as you continue to make mortgage and rent payments on time, there is no reason why you should not be able to remain in the home for the full length of the leasehold.
Gradually Purchase More:
If you like the idea of living in a vibrant city like Manchester, shared ownership Manchester properties from Onward Living allow you to purchase more of the property over time in a process known as staircasing. Onward Living offers a range of new-build homes around the UK with the option to start off with buying a percentage share that can gradually be increased. Currently, you are able to purchase 10% or more each time, although this is set to be lower in the near future, allowing shared ownership buyers to purchase smaller amounts each staircase. This allows you to eventually work up to owning 100% of the home at a pace that you are comfortable with.
If you’re struggling to get the deposit together for a home or are worried that you will not be accepted for a mortgage, shared ownership can be an ideal alternative to consider.
