Many of us dream of getting on the property ladder, enjoying the bliss of home ownership and never again having to deal with a grumpy landlord. However, this dream can often prove to be unattainable for many hopeful first-time buyers, with mortgage and deposit costs out of their reach. So, what if we told you that there was another way to get on the property ladder? Take a read of our guide, outlining and simplifying the Shared Ownership scheme.
Shared Ownership explained – How it works:
With a Shared Ownership scheme, you part-own and part-rent your home; paying a mortgage on the share you own and rent to a housing association on the remining share. Shared Ownership allows buyers to purchase a share of a property, typically between 25% and 75% at a time, with a deposit to match the chosen share. For example, if you are purchasing a 30% share of a property, your deposit may only need to cover 10% of that 30% share; a realistic and affordable route to home ownership. In addition to the reduced deposit and mortgage costs, the part of your property that you pay rent on is often at a lower rate than the open market. Buyers can also buy further shares of their property as and when it suits them until they eventually own 100%; a process known as staircasing.
Who can apply and how to find out if you’re eligible:
Essentially, the Shared Ownership scheme was designed for those who would like to own their own home but cannot afford to buy on the open market; a position an increasing amount of people are finding themselves in due to the continuous rise in house prices. This has resulted in a soaring interest around the scheme and a record number of applicants in 2020. Shared Ownership homes can often be found in private developments, providing affordable housing in a variety of sought-after locations!
You can apply, either directly through the housing association or via private sale, however there are some general eligibility requirements to meet, including:
- You must be at least 18 years old
- Your annual household income must be less than £80,000 outside of London and £90,000 inside
- You cannot already be a homeowner
- You cannot have enough money to buy a home outright
- You must be able to demonstrate that you have a good credit history and can afford both the mortgage and rent payments
- With some developments, you might need to live or work locally
In summary, the Shared Ownership scheme really could make your dream of home ownership a reality, allowing buyers to reach their deposit goal sooner and purchase a home in their desired location, finally giving you the space you crave. Shared Ownership also provides buyers with a sense of home security that is often hard to find in rented homes, including the option to buy more shares of your property when you can afford to do so, and sell the existing shares you own at any time.
If you’re a London local looking to put down roots in the capital, why not take a look at Clarion Housing Groups Southall developments, perfectly positioned in the heart of this buzzing town. Here, you will discover Union Walk at The Green Quarter, where shares start from 25% with a 5% mortgage deposit of £5,563, and Junction West, where shares start from 25% with a 5% mortgage deposit of £6,188.