How does a Shared Ownership work?
Also referred to as part buy/part rent, Shared Ownership allows buyers to purchase a share of a home – usually between 25% and 75%. Purchasers will pay a mortgage on the share that they own, and a below-market-value rent on the remainder to a housing association, along with any service charge and ground rent.
What are the disadvantages of Shared Ownership?
What are the downsides to shared ownership?
- Maintenance charges.
- No renting allowed.
- Buying up increased shares in your property can be expensive.
- Restrictions on what you can do.
- The risk of negative equity.
- Issues around selling your share when moving home.
- You don’t have greater protection under shared ownership.
Is it worth buying a Shared Ownership house?
Even though your mortgage repayments plus rent may be as much as (or more than) the repayments on a full mortgage, the smaller deposit required makes it easier to achieve. Shared ownership is also preferable to renting, as the portion of the home that you own will grow in value if the price of the property goes up.
How is Shared Ownership rent calculated?
If you divide the unsold equity by 100 and multiply by 3 you will get the total rent payable per annum. Just divide this by 12 to get the monthly rent payable! The amount of rent will vary for each home depending on the share you buy and the value of the property when you buy it.
Can you be kicked out of shared ownership?
You can not be evicted from a shared ownership scheme property that you partially own in the same way a landlord can evict a tenant. However, the housing association may be able to get a possession order through the courts to compel you to sell your share of the property if you can’t pay your rent.
How much income do I need for Shared Ownership?
There is no set minimum income for Shared Ownership – either for single buyers or as a joint household income. Each home will have its own valuation and the housing association will determine the minimum income required for that property to be affordable to people earning under the maximum allowance threshold.
How is shared ownership rent calculated?
What is shared ownership and how does it work?
Overview of Shared Ownership. Shared Ownership is an alternative home ownership scheme which gives first time buyers,and those that do not currently own a home,the opportunity to purchase
What does shared ownership really mean?
What Does Shared Ownership Actually Mean? A common misconception among first time buyers is that Shared Ownership means sharing a property with someone else. However, the “Shared” in “Shared Ownership” actually refers to sharing the ownership of a property with a provider; typically a housing association such as Southern Home Ownership.
What are the benefits of shared ownership?
Benefits. 1. Affordable. One of the main benefits of Shared Ownership is that it is affordable. Shared Ownership allows people to live in a nicer property, which might not have been affordable else. The rent on the property is less than the rate charged on the open market, usually charged at 2.75% of the property value for each year. 2.
What do you know about shared ownership?
Costs can spiral. Check you can afford increased maintenance charges.