Shared Ownership Vs Buying

When you’re looking for a new home, the market and government give you a variety of ways in which you can get onto the property ladder - Help To Buy, Shared Ownership and Buying.

While Shared Ownership offers a great alternative route to homeownership for buyers who are otherwise unable to buy on the open market, it’s always important for buyers to weigh up their options.

In this Accent Housing blog, we are going to compare shared ownership vs buying. There are some potential pitfalls too, so consider the pros and cons when deciding which option is best suited to your circumstance.

What Is Shared Ownership?

Shared ownership schemes are run by housing associations and are usually open to first-time buyers. They enable you to take out a mortgage on a portion of your home (ranging from 25 per cent to 75 per cent) and pay rent on the remainder. This means you don’t need as big a mortgage as you would if buying the home outright.

This scheme is the perfect option if you live in an area where the house prices are high and aren’t wanting to relocate.

Over time the resident can purchase more shares in the home. This is otherwise known as staircasing. You can staircase all the way to the top where you will eventually purchase the house outright.

Is It Worth Buying Shared Ownership?

It totally depends on your circumstances whether shared ownership is the perfect option for you. It wouldn’t say there are a set of rules, it is entirely personal.

As we have figured, shared ownership means part buy, part rent, meaning you don’t have to save up a full deposit to get onto the property ladder.

The only part of the property you buy is the deposit you put down. So, for anyone on a lower income, it’s quite an ideal option. Especially if you live in an above-average location where the house prices are extortionate.

It will take less time for you to save up the deposit. Meaning you don’t have to worry about someone snatching your dream home off the market.

What Is The Downside Of Shared Ownership?

Like any scheme or benefit, there come pros and cons. Shared ownership is no different and that’s why we’d like to share with you both sides of the barrel. Here at Accent, we want to be transparent with our residents so they fully understand what it is they’re getting.

First, let’s start with the advantages.

The main advantage of shared ownership is it’s more achievable than buying/full ownership. 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. If this happens, you’ll have some equity that will help you take your next step on the property ladder.

When staircasing (Purchasing more shares) your shared ownership property will vary in price. When you decide to buy an additional share of the property, the price is based on an independent valuation at the time. Therefore, the price you pay per share will rise with house prices the longer you wait.

Am I Eligible For Shared Ownership?

Of course, some eligibility criteria come with the shared ownership scheme. There are many thoughts around eligibility, a common one being that it’s only for first-time buyers or key workers.

We’re here to tell you that this isn’t true. These are some of the criteria:

  • You will need a deposit – Typically, a deposit between 5%-10% of the share you’re buying is acceptable.
  • If you are in a position to buy a home outright, you won’t be able to purchase a shared ownership home.
  • It must be your only home – That means you might be a first-time buyer or a previous homeowner who can no longer afford to buy a new one. And when we say the previous homeowner, we mean someone who used to own a home but no longer does.
  • Your household earns £80,000 a year or less. And if you’re in London, £90,000 or less.

Shared Ownership Homes With Accent Housing

All our available shared ownership homes are available on Homemade is an experienced property sales team within Accent Housing.

We offer both new and resale shared ownership homes. Over the years, we’ve helped thousands of people fulfil their ambition of being homeowners with our shared ownership properties. Our team are experienced industry experts and proud of what we do. We would love to help you find your next home.

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