Why Shared Ownership is perfect for first time buyers
4 July 2022
As we witness a continuing rise in house prices across the country, first time buyers need to increasingly look toward alternative ways to get on the property ladder.
Whether you’re looking for a modern, 1 bedroom apartment in London or a 3 bedroom house that you and your family can grow into, here’s why Shared Ownership could be the best option for you.
What is Shared Ownership?
Shared Ownership is a government scheme that helps first time buyers, who cannot afford large deposits or mortgage payments, get onto the property ladder.
Under the scheme, you buy a percentage of a property – usually between 25% and 75% – then pay a monthly rent on the remaining portion.
One of the key advantages of Shared Ownership is that you generally pay less each month than you would privately renting or paying a traditional mortgage, and you still have the opportunity to own the entire property as your circumstances change.
The deposit needed is far smaller than buying a home
One of the most common problems faced by first time buyers in the UK is saving up for a deposit. A third of the UK population has less than £600 in savings, which highlights the difficulty in saving for a deposit.
A key benefit of Shared Ownership is that the deposit you pay is typically much lower than if you bought a property via a traditional mortgage. This is because the deposit is based on your share, rather than the value of the entire property. A typical Shared Ownership deposit is between 5-10%.
Deposits can be as small as £5,000 – depending on the market value of the property and what percentage you wish to purchase. This means that first time buyers can sometimes find themselves buying larger homes than they’d otherwise be able to afford.
Eligibility criteria is ideal for buyers with a smaller income
Due to the nature of Shared Ownership helping people get onto the property ladder, there are some eligibility requirements that must be met. You are eligible if:
- Your household has a combined income of £80,000 a year or less (£90,000 or less in London)
- You are either a first time buyer, someone who used to own a home but can no longer afford one, or an existing shared owner looking to move
More freedom than renting
With Shared Ownership homes, you have the freedom to style your home in ways renting doesn’t allow. You can make as many decorative changes to the property as you wish, so get the paintbrush at the ready!
Once you’ve purchased a share in the home, you can choose to purchase further ownership. This is known as ‘staircasing’, and allows you to own up to 100% of the property. Shared Ownership allows you to staircase in your own time, giving you the freedom to build equity in a property over time.
Register Your Interest Today
We provide an array of affordable, top quality, modern apartments and houses across England, all of which are available to purchase with Shared Ownership. Start your search by viewing our current properties available.