What Exactly is Shared Ownership?

Buying your own home can be a daunting experience, especially with the high cost of living making it harder to save for a large deposits. 

An alternative option to purchasing a property outright, it Shared Ownership. Although not available with all properties, some new developments are offering this tenure to potential buyers in the aim of helping more people to own their own home. This access to modern and high quality homes can be the best opportunity for many buyers to get onto the housing ladder.

But what exactly is Shared ownership?

Shared Ownership allows buyers to purchase a portion of a property (typically between 25% and 75%) and pay rent on the remaining share. This makes it more affordable, especially for first-time buyers or those with limited budgets.

We have lots of conversations with people who think they will never be in a position to own their own home! A Shared Ownership property can provide an accessible route for people, helping them get onto the property ladder and to become a home owner.

But why is Shared ownership cheaper at the outset? Buyers will only need a mortgage for the portion they are purchasing. For example, if you can afford a mortgage on 50% of the property value then the deposit required at the outset will be HALF of what would be required for full ownership.

The exciting element of Shared Ownership is that buyers will have the option to increase their ownership in the property to 100%, when their budget allows them to purchase additional shares, this process is known as “Staircasing”. 

Another benefit to Shared Ownership is that buyers have substantially more security in their property than if they were simply renting from a Landlords, as the buyers own a portion of the property they live in.

I can imagine many of you reading this will be thinking, how do we pay rent and a mortgage at the same time? The rent on the remaining share of the property is usually set at a below-market rate, making overall monthly payments more manageable to the buyers.

If you would be interested in a Shared Ownership property, please feel free to contact one of our offices and we can keep you informed of new developments coming to the market.