As a first time buyer, trying to find a way to save up for a hefty deposit can be overwhelming.
But there are options. One of which is a shared ownership scheme.
Simply put, it is a system by which a buyer purchases a portion of the property and pays rent on the remainder, typically to a local authority or housing association.
Depending on the scheme, the share could be between 25% and 75% of the home’s total value.
You’ll need to take out a mortgage to pay for your share of the home’s purchase price.
Shared ownership properties are always leasehold. Not sure what leasehold means? Read this article that explains the difference between leasehold, share of freehold and freehold properties.
You can generally buy a home through shared ownership if:
If you’re aged 55 or over you get some added benefits under shared ownership schemes.
It works in the same way as the general shared ownership scheme, but you can only buy up to 75% of your home. Once you own 75% you won’t have to pay rent on the remaining 25%.
As time goes on you can buy a larger share in your home. This process is called “staircasing”.
When you decide to purchase additional shares, it will depend on the value of your home at the time you are purchasing. So for example, if prices in your area have gone up, the cost of your new share may rise as well. However, if property prices go down then you could pay less for your additional shares.
The housing association will get the property valued and let you know the cost of your new share. You’ll have to pay the valuer’s fee.
Shared ownership gives first time buyers a chance to take that all important first step onto the property ladder.
If you are interested in purchasing homes under a shared ownership scheme and want to know more, contact us 020 8740 6622 or via email at [email protected].