The Pros and Cons of shared Ownership

 

Shared ownership is a housing scheme in the UK that allows individuals to part-buy and part-rent a property. It is primarily aimed at people who cannot afford to buy a home outright on the open market. Shared ownership properties are usually offered by housing associations, but some private developers also participate in the scheme.

Under shared ownership, a buyer purchases a share of the property, typically between 25% and 75%, and pays a subsidized rent on the remaining share owned by the housing association or developer. The buyer will need to secure a mortgage or use their savings to cover the cost of the share they are purchasing.


The advantages of shared ownership include:

Affordability: It can be a more affordable option for individuals who cannot afford to buy a property outright.

Incremental Ownership: Buyers have the opportunity to increase their share in the property over time through a process called staircasing. This allows them to buy additional shares and reduce the rent they pay.

Security of Tenure: Buyers have the same rights and responsibilities as any other homeowner, providing more stability compared to renting.

Eligibility: Shared ownership is often targeted at first-time buyers or individuals with a housing need, such as key workers.


There are also some disadvantages to keep in mind:

Limited Choice: The availability of shared ownership properties can be limited, depending on the area.

Shared Costs: Buyers are responsible for paying service charges and other costs associated with the property.

Reselling Restrictions: Some restrictions may apply when selling a shared ownership property. The housing association or developer usually has the right of first refusal to find a buyer for the share being sold.

Income Limits: There are usually income caps to be eligible for shared ownership, and priority may be given to those with lower incomes.

It's important to note that the details and specific rules of shared ownership can vary, so it's advisable to consult with housing associations or developers, as well as mortgage advisors, for comprehensive and up-to-date information.

To begin your property investing journey, here are 4 very useful links for you!
Sell your property: https://bit.ly/hgsellyourproperty
Buy property: https://bit.ly/hgbuyproperty
Property courses/coaching: https://bit.ly/kapropertyeducation
Get finance for projects: https://bit.ly/hgpreloan


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