How Can Shared Ownership Help You Land Your Dream Home? - By Jessica Foreman

Tuesday, 19 July 2016

Getting your foot on the property ladder isn't an easy thing to do. The average house price in the UK is now a staggering £284,000 and London prices often surpass a jaw-dropping £600,000. So, it's not surprising if you're struggling to save a big enough deposit to secure a mortgage for your dream home! That's where shared ownership comes in...

What is shared ownership?
Shared ownership is where you part buy and part rent, owning anywhere between 25% and 75% of the property. The rest is owned by a housing association, and you'll have to pay them rent on their share while you simultaneously pay for your mortgage. You can only get a mortgage once you've:
  • put down at least a 5% deposit
  • had your credit score checked
  • had a lender review your income and outgoings to check you can afford everything
You might also need to pay a monthly service charge too, as most shared ownership properties are leaseholds rather than freeholds.

Under what circumstances would I want use a shared ownership scheme?
Shared ownership is a great idea if you're committed to the idea of buying the perfect house, rather than one that's too small, too old or needs too much renovation work. For instance, you might have your heart set on a property that is brand new, modern and solidly constructed on a new build estate.
Unfortunately, the best quality and biggest properties are the most expensive - so expensive, in fact that you might struggle to afford one without a shared ownership scheme or a leg up from the bank of mum and dad. In this case, shared ownership is a great idea and could help you to get your dream home without having to beg money from your family or take on bigger mortgage than you can afford to repay.

Is shared ownership better than renting?
Shared ownership can be better than renting. If you have enough saved for a small deposit, it might be worth getting on the ladder using shared ownership so that only a percentage of your outgoings are swallowed up in rent, rather than all of it. You can also increase your share of the property at a later date - something that is called 'staircasing' (usually in 10% chunks).

Am I eligible for shared ownership?
You're eligible if you'ree a first time buyer if your household income is £80,000 a year or less (or £90,000 or less in London). Remember that not all mortgages are eligible for shared ownership, so you'll need to talk to an independent broker and see what your options are. It's also important to understand the distinction between a shared ownership scheme and a shared equity scheme, so read up on both!

How can I find a home to buy using a shared ownership scheme?
If you're in the market for one of the desirable new homes on a modern estate, why not use the internet to help you land your dream house? For instance, there are websites that list new builds that are eligible for purchase using a shared ownership scheme and you can register for alerts so that you're always at the front of the queue for viewings and purchases. You can also contact your local housing association to find out which properties are available under shared ownership.

Jessica Foreman is a Durham University graduate specialising in business and lifestyle based writing. She has developed her skills on projects surrounding The British Broadcasting Company, and running a print and online based magazine whilst at university. She is currently looking towards starting her Masters in Mobile and Personal Communications as well as broadening her horizons through travelling.