Those who are having a tough time finding their way onto the property ladder could consider the option of Shared Ownership. In this article we explain what it is and whether it may be the right option for you.
What is Shared Ownership?
Shared Ownership is the process of an individual purchasing a share, often between 25 – 75% of a property’s value, using a deposit and a mortgage, and then paying the rent on the remaining share.
These are called leasehold properties, which allow you to own the lease on them for a fixed period of time (usually 99 years). You’ll then have to pay a service charge for the property, usually charged on a monthly basis.
Am I eligible for Shared Ownership?
To be eligible for Shared Ownership, you need to have an income of less than £80,000 per year if you live outside London and £90,000 for those living inside London.
You also need to be at least one of:
- An existing shared owner looking to move
- A first time buyer
- A previous homeowner who can’t afford to buy a new property
Advantages of Shared Ownership
- Better credit score: despite the temporary drop, paying off a mortgage over time will have a positive impact on your credit score.
- You’re on the property ladder: the primary selling point for this scheme is that you’re one step closer to completely owning a property.
- More security: you won’t have a landlord who can all of a sudden end your tenancy. Instead you can opt to increase your share in your property whenever you want, putting your mind at ease.
Does shared ownership sound like a viable option for you? Let us know your thoughts on Twitter @haybrook_uk!