With many people unable to access the property ladder the Government has implemented a number of initiatives to help. One of these is Shared Ownership, which assists individuals who can’t afford the mortgage on 100 per cent of a home by offering the opportunity to purchase a share of a property instead. This proportion can range anywhere from 25 to 75 per cent and rent is paid on the remaining share.
To be eligible to buy a property through Shared Ownership your combined household income must be less than £80,000 a year outside London and £90,000 a year or less in London. Also, you must either be a first-time buyer, someone who used to own a home who now can’t afford to buy again, or already own through Shared Ownership but are looking to move.
Properties available through the scheme are always newly built, although resale programmes are available through the local housing association.
To pay your share you can either take out a mortgage or use savings if you prefer. Additionally, the deposit on a Shared Ownership property tends to be just 5 per cent, compared with the standard 10 per cent. Once you have paid off your initial percentage you will also have the opportunity to buy further shares of the property.
Shared Ownership provides another route onto the housing ladder for those who may not ordinarily have been able to afford to. It still requires buyers to have a steady income, good credit history and access to a modest deposit. Nonetheless, this initiative helps to level the playing field between those with access to the bank of mum and dad when raising a deposit for market purchase and those without.