How this concept is spurring thousands of Brits to buy their homes
Property ownership is being rapidly brought into the reach of first-time buyers and low-waged families through a concept that is starting to take Britain by storm.
Shared ownership is, admittedly, not a new magic formula to getting on the property ladder. But it is increasingly being turned to as an alternative way to purchase a home – be it an apartment or a three-bed house.
The reasons more families and first-timers are researching shared ownership options are mainly down to the sky-rocketing price of properties, the increase of deposits to obtain mortgages and the rising ambitions of millennials to have a home to call their own.
And as shared ownership in London is now trending so highly among potential investors, the Mayor of London has launched a dedicated website of shared ownership properties available for sale across the capital.
Shared ownership is also being seen as a problem solver to the housing crisis in London and elsewhere as first-time buyers can access properties that would otherwise be out of their financial reach. Studies have shown that too often, they are usually priced out of the market because of the enormous sales prices that are more accessible to city high-flyers.
Even on London’s outskirts, there are many houses for sale in Barnet Thurrock and other commuter towns that are offered for shared ownership.
An incredible 40,000 investors have gone down the shared ownership route, and there are portfolios of thousands of properties available to chose.
So what is shared ownership and why is it so popular? It does as it suggests – a first-time buyer can buy between 25 per cent and 75 per cent of a property while renting the rest from the other ‘owner’, usually a housing trust.
Investors will have to find a deposit of 5 per cent and then utilise a ‘shared ownership’ mortgage. Helpfully, the British government has set aside £7 billion a year to provide financial support for first-time buyers.
There are a few conditions that investors have to pay attention to be able to apply. Their household income should be a maximum of £90,000 a year if they live and work in London, or £80,000 a year or less outside the capital.
Shared ownership applications are open to a first-time buyer, those that used to own a home but can’t afford to buy one now, and priority may well be given to those with local ties to the areas or those serving as military personnel. All shared owned homes are leasehold.
The concept is not only exclusive to young families. If buyers are aged 55 and over or are unable to afford a property, they can apply to the Older Person Shared Ownership (OPSO) scheme, formerly known as Home Ownership for Older People (HOOP), for help.
The UK government’s www.ownyourhome.gov.uk/scheme/opso/ website details the benefits of OPSO and how shared ownership works. Those with a long-term disability can apply for a shared mortgage through the Home Ownership for People with Long-Term Disabilities.
When the opportunity arises, homeowners can buy a larger share of the property up to 75 per cent. This is known as staircasing – and once the 75 per cent share has been bought, the investor no longer has to pay rent on their other element of the house they don’t own.
First-time buyers now have no reason to put off their ambitions of buying a property given the amount of help that is now available. All they have to do is take a critical look at their financial arrangements and seek out a lawful shared ownership property specialist to receive the right advice on how to obtain a mortgage for a property that is right for them.