Here at Help to Buy North West we can’t help but be biased to the Low Cost Home Ownership scheme known as Shared Ownership. Anything that helps aspiring home owners onto the property ladder, we’re a fan of!
Here are the 5 reasons why we love Shared Ownership…
- It’s affordable
It’s not called Low Cost Home Ownership for nothing! Buying with Shared Ownership means you’ll need less of a deposit - as you only need a deposit for the share you buy – which can be as little as 5% of the share you are purchasing. You’ll also need a smaller mortgage, as you are only buying a percentage of the property to begin with.
Take this example:
House price: £120,000
50% Share Price = £60,000
Mortgage & Deposit = £60,000 (Deposit £3,000)
Rent Payable = £126.92 per month
So you could buy 50% of a home with a 5% deposit of just £3,000 and pay a reduced rent of just £126.92 per month.
If we take the same example buying on the open market, you would need a deposit of between £12,000 and £18,000 meaning you would potentially be saving 3 times longer! So it makes sense to buy what you can afford now, and work towards owning more down the line.
- It’s accessible
The Government recently relaxed the criteria for Shared Ownership to make it accessible to more people. You can now access the scheme if you’re a first-time buyer earning less than £80,000 a year. Existing Shared Owners can also now benefit by being able to move from one Shared Ownership home to another, and members of the armed forces receive priority.
It’s not just for younger buyers either – there is a part of the scheme that is specifically for those aged over 55. Older Person’s Shared Ownership or OPSO is for older people who may be looking to downsize as their current home is too big for them, or has become unsuitable for their needs.
It works in the same way as the general Shared Ownership scheme, but the maximum share available is 75%. Once you own 75% you won’t have to pay any rent on the remaining share.
- It’s available on a range of homes
If you want to buy a new build Shared Ownership property you will need to look for a new development offering the scheme. However, there are also homes which have been bought through Shared Ownership in the past that are also available - known as Shared Ownership Resales. These are properties that the existing Shared Owner is now looking to sell and move on from. So, if you’re after a home in a more established community this could be the route for you.
- It’s easy to buy more shares
As a Shared Owner you have the option to buy more shares in your home, known as Staircasing, and you can do this at any time from when you buy the property
This will be a very similar process to when you bought your first share and you will need to liaise with your Housing Association and Solicitor. When you staircase the amount of rent that you pay on the unsold share will reduce accordingly.
- It’s easy to sell your home
As a first time buyer, your first home is unlikely to be your last, however now that you are on the property ladder, buying your next home should hopefully be easy– and selling your Shared Ownership home will be too!
The Housing Association who owns the remaining share on your home may even be able to nominate someone to buy your home, meaning you might not even have to find a buyer yourself. If they can’t nominate someone, you are free to sell your home on the open market.
The person who buys your home will also be a new Shared Owner, so you’ll also have the good feeling of knowing your first home is helping someone else onto the property ladder.
So that’s why we love Shared Ownership – affordable, accessible, available on a range of homes, easy to staircase and easy to sell when the time comes – what’s not to love?
You can find out more about Shared Ownership, Resales, and OPSO here.