Owning a home is a dream cherished by many, but for first-time buyers, it can often seem like an unattainable goal in today’s real estate market. The soaring property prices, coupled with the requirement for substantial down payments, can deter many from leaping into homeownership. However, there’s a solution that’s gaining popularity and making homeownership more accessible – Shared Ownership.
Shared Ownership is a government-backed scheme in the United Kingdom designed to help first-time buyers get a foot on the property ladder. In this blog, we’ll explore the concept of Shared Ownership, its benefits, and how it can make the dream of owning a home a reality for many.
What is Shared Ownership?
Shared Ownership, also known as ‘part-buy, part-rent,’ is a housing program that allows individuals to purchase a share of a property (usually between 25% and 75%) and pay rent on the remaining portion. This scheme is often facilitated by housing associations and is primarily aimed at helping first-time buyers and individuals who can’t afford to buy a home on the open market.
Key Benefits of Shared Ownership:
Affordability: One of the most significant advantages of Shared Ownership is that it enables first-time buyers to get onto the property ladder with a smaller deposit. Since you only purchase a share of the property, your initial investment is considerably lower compared to buying a property outright.
Lower Monthly Costs: In addition to the lower deposit, your monthly mortgage payments and rent on the remaining share can be more affordable than the cost of renting a similar property on the open market.
Staircasing: Shared Ownership allows you to gradually increase your ownership stake in the property over time. This process is known as ‘staircasing,’ and it gives you the flexibility to buy more shares when your financial situation improves. Eventually, you can own the property outright if you wish.
Security and Stability: Shared Ownership provides a sense of security and stability that renting often can’t offer. You have a long-term stake in the property and can make it your own by personalizing it to your preferences.
No Chain: Since Shared Ownership properties are often newly built or resold by housing associations, there is no property chain involved, making the buying process smoother and less stressful.
Eligibility: Shared Ownership is primarily intended for first-time buyers, but it can also be an option for people with a household income of less than £80,000 (or £90,000 in London) who can’t afford to buy on the open market.
Location Options: Shared Ownership properties can be found in various locations, from urban centres to suburban areas, offering more choice in terms of where you can live.
The Process of Buying a Shared Ownership Property:
Check Eligibility: The first step is to determine if you meet the eligibility criteria for Shared Ownership. You can do this by consulting with housing associations or the government’s Help to Buy website.
Find a Property: Search for a Shared Ownership property that suits your needs and budget. Housing associations usually list available properties on their websites.
Get a Mortgage: Once you find a property, you’ll need to secure a mortgage for the share you intend to purchase. It’s essential to consult with a financial advisor who specializes in Shared Ownership to find the right mortgage deal.
Legal Process: Like any property purchase, there is a legal process involved, including searches, surveys, and conveyancing. It’s recommended to seek the services of a solicitor who is experienced in Shared Ownership.
Completion: Once the legal process is complete, and you have exchanged contracts, you’ll officially become a Shared Owner and can move into your new home.
Shared Ownership is a fantastic opportunity for first-time buyers to step onto the property ladder and invest in their future. It offers financial flexibility, security, and the chance to gradually increase your ownership stake over time. If you’re struggling to save for a hefty deposit or have a limited budget, Shared Ownership may be the perfect solution to make your homeownership dream a reality. So, don’t let the daunting property market deter you from your goal of owning a home – explore Shared Ownership and embark on your journey to becoming a homeowner.
If you are a first-time buyer looking for help getting onto the property ladder get in touch with the number one Billericay Estate Agent for more insight into home owning.
