How do Shared Ownership Mortgages work?
We can help you to utilise the shared-ownership schemes offered by local councils and housing associations, which can be useful when you want to get on to the property ladder for the first time.
Shared Ownership, what do I need to know?
There are a number of factors to consider when taking on a shared ownership property
Shared ownership is a scheme whereby one can purchase a ‘share’ in a property – the other ‘share’ often being owned by either the local council, or a housing association. Depending on the development, or the individual affordability, a different share of the property may be purchased (for instance, a 25% share, or a 50% share).
A ‘rent’ will be payable on the ‘share’ owned by the 3rd party – this, again, will be based on both the development, and the amount of share purchased.
Very often, even with houses, a ‘service charge’ is included as part of the purchase.
Further ‘shares’ can be purchased, allowing applicants to eventually own 100% of the property.
Fewer lenders offer mortgages under the shared ownership scheme – but there is a respectable amount that can assist.
Frequently Asked Questions
Need more information - is this right for you?
Shared ownership can be a quicker route to getting on the housing ladder, as you are only buying a share in the property. Depending on affordability, different ‘shares’ can be purchased (for instance, a 50% share). In future (and, again, depending on affordability) further shares can be purchased – this is referred to as ‘staircasing’. This will allow, potentially, the ability to own the property outright.
How much would I have to pay in rent?
Rent is calculated based on the share you own and the share you are renting, and will vary from landlord to landlord. This rent must be recognised as a ‘commitment’. An affordability calculation is also carried out by the third party, to ensure that the monthly outgoings are manageable.
How long does it take before I own the property?
This depends on the agreement you take out, and how much of a share you purchase and how much you rent. You don’t have to purchase any more shares if you don’t wish to, you will just continue to pay the rent even when the mortgage (share you own) is repaid. We can help you to plan and budget around your needs – we provide fee-free advice to all our clients.
We can help you to understand more about how shared ownership works and if it’s right for you – contact us today to arrange an appointment!
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
