For some people owning their own home is a mere dream. The high deposits required are just too much for many people & then having to find a willing lender to give them a mortgage on top of that makes it even tougher. This is where the shared ownership scheme can help.
Shared ownership is designed for people who would find it difficult to buy a property outright. It is a way of part owning – part renting a property. Below we outline how it works.
Shared ownership properties are sold through housing associations. You buy a share of the property (between 25% to 75%) of the home’s value and then pay rent on the remaining share. The rent you pay can be up to 3% of the association’s share of the property’s value.
Shared ownership is appealing to both the young and old many of whom are first time buyers but not entirely. The homes given under the scheme are generally new builds or have been around for just a few years so they benefit from modern designs and green credentials.
There are some restrictions that apply pass in order to qualify for shared ownership & they are as follows:
Staircasing is basically buying more shares into your property as time goes on.
The cost of increasing your share will depend on the market value of the property at the time. To buy more shares you will need to pay for the housing association to carry out a valuation of the property and make sure you have enough funds or mortgage in place to pay for the extra share.
If you want to sell your share you must remember that the housing association has the right to find a buyer first before you put it on the open market. Again, the amount of money received from this will depend on the market value of the property at the time of selling.