So what is the difference between being a first time buyer or buying as an older person?
Shared Ownership properties are typically available for first time buyers and older people. There are opportunities to buy a shared ownership home if you are not a first time buyer, but this will depend on the requirements from the housing provider.
Shared ownership for first time buyers
Shared Ownership is a housing product typically offered by housing associations that allows you to part buy, part rent your home. First time buyers get the opportunity to get on the housing ladder quicker. So if you are struggling to get a mortgage to buy a home outright then shared ownership could be for you.
For example, you might buy a 25% share of the home initially and pay rent for the remaining 75%. So there will be monthly mortgage and rent payments to make.
For first time buyers most of the time there will be an opportunity to buy the home outright. This will depend on the housing provider and the schemes that are on offer. Make sure you check this out.
Shared ownership for older people
Likewise if you are looking to downsize, retirement shared ownership properties can give you the opportunity to release your equity if you are selling your current home.
In the case of older people’s shared ownership, you can only ever own up to 75% of the home. However, once you reach this limit you will not need to pay rent on the remaining share.
Common themes with both these shared ownership products
These can be newly built homes or they can be existing properties. This is where current shared ownership occupants are looking to move to another property much the same as when people look to sell a home outright.
In any of these scenarios the minimum share you can purchase will be 25% of the property. In both cases a greater share of the property can be purchased, called staircasing.
All properties are leasehold, so you will need to pay a service charge to the housing association.
Know the financial commitment for shared ownership
Like anything, you need to work out what outgoings are required to part buy, part rent your own home.
Here are costs you will need to consider:
One off costs
How much deposit is required
Legal and mortgage fee costs for the share of the property
Deposit you are required to put down
Utilities, for example, water, gas and electricity
Food and other general outgoings you have
Blog post by Paul Malone, Director of MovingSoon (link to https://movingsoon.co.uk/) the affordable homes website listing available now and pipeline shared ownership properties UK wide.