Buying a house is a huge step, especially if you are a first time buyer. There are many different factors to consider before you sign the contract and commit to the biggest purchase of your life so far. For many people, the biggest concern when buying a property is the cost. It would be amazing to have a limitless budget, but for the majority of people that simply isn’t the case. So, when it comes to looking for houses to buy, shared ownership may be a good option to consider. So, what is a shared ownership property, and is it the right choice for you? Keep reading to find out more.
What is a Shared Ownership Property?
Shared ownership means that a percentage of the property is purchased, rather than the entire home. The buyer purchases between 10% and 75% of the property depending on how much they can afford to borrow, and the size of their deposit. The buyer then pays rent to the housing association for the remaining portion of the property.
Buying a shared ownership property means that the buyer will make two payments each month, one mortgage payment for the portion of the property that they have purchased and one rent payment for the portion of the property owned by the housing association.
Is a Shared Ownership Property Right For You?
Seeking professional financial advice is always important before doing anything as important as taking out a mortgage or buying a home. So, talking to an independent financial advisor will usually be the first step to take when deciding if a shared ownership property is the right choice for you.
Here are some of the reasons that people may choose to buy a shared ownership property:
Makes Property Ownership More Accessible
With house prices so high right now, buying a house can be extremely hard, even for people on reasonable wages. Buying a shared ownership property makes housebuying far more accessible to a larger number of people, who otherwise wouldn’t be able to afford to get on the property ladder. You can use a shared ownership calculator to better understand more about the affordability of shared ownership homes and your potential budget.
May Be Able to Buy a Home Faster
Saving up for a deposit to put down for a mortgage can take a really long time. When buying a housing association property, you will usually require a smaller deposit, meaning that you can get onto the property ladder faster.
Can Purchase More of the Property
Most people buy an initial share of up to 75% when they purchase a shared ownership property. But you’re not limited to this share forever. As you live in the property longer, it becomes possible to gradually buy a bigger share, right up until you own 100% of your home.
As you can see, a shared ownership property opens up the prospect of homeownership, and could be worth exploring further to see if it is the right option for you.
