There’s never been a better time to set foot on that fabled property ladder. But there is an alternative path that many first-time buyers, low-income workers and even friends are increasingly heading down.
Shared Ownership is the ‘new’ way of putting a roof over your head, and incredibly 40,000 plus first-time buyers have opted for this journey. And shared ownership in London is becoming such a popular trend maybe you should consider this route to a new home.
What’s It All About?
Shared Ownership is what it says on the can. A first-time buyer buys a share in a property, usually between 25 and 75 per cent, and an affordable housing trust will typically own the rest. When you feel you can afford to buy more portions of the property, then you can do so. This is known as ‘staircasing’ – effectively purchasing a greater portion of the property.
Shared Ownership can be seen as a mix of buying (your share of the property) and renting (the rest of the property owned by the trust). Once you achieve that 75 per cent quota, you don’t have to pay rent on the other share.
Can I Invest in Shared Ownership?
You know, the beauty of shared ownership is the fact that almost anyone can buy in to a property. From first-time buyers to low-income families are increasingly looking at this route.
While UK shared ownership schemes are different, those that can apply broadly fall into these categories:
First-time buyers, or those that had a home but can’t afford one;
People renting a housing trust or council-owned property.
Conditions may vary for applicants, but if you are military personnel, then you may be given priority.
Equally, those with a local tie to where the shared ownership scheme is could also be treated as a priority.
Let’s Get Down to the Financial Nitty-Gritty
So getting down to the finer details, potential applicants need to be earning a minimum of £20,000 or with a combined household income of less than £80,000. For those looking at shared ownership in London, the threshold is less than £90,000.
Isn’t Shared Ownership the same as Help To Buy?
Wow, hang on. Let’s take a step back. When you decide to apply, you can seek a number of different routes to finance the property buying process:
So there is Shared Ownership: this buys a portion of the house.
Help to Buy: this is different and is a government-backed equity loan scheme that allows first-time buyers to buy a ‘new build’, and the buyer has to raise 5 per cent for a deposit
Right to Buy: This allows tenants who rent their homes from their local council to buy their homes at a discount.
Where’s the Money then?
Well, most of it is tucked up in the UK’s Government coffers. All £7 billion of it annually is left lying untouched because potential first-time buyers aren’t aware of the financial help that they can access.
And nearly a quarter of first-time buyers, or those that could apply, are unaware of what Shared ownership is all about.
Shared Ownership is My Route. Give me 5 Benefits
You will be exempt from Stamp Duty if the value of the property is under the minimum threshold;
The lower outlay enables you to buy a bigger property than you might think you can afford;
Your combined monthly mortgages and rent payment will often be less than renting privately;
You can build up your property share, so you are investing in a home, not renting it;
Your deposit will be a percentage only of the share you can afford – not a 100 per cent of the property value.
I’m convinced. Where are schemes of Shared Ownership in London?
Fortunately there several properties available for shared ownership in London. For example look at Property Booking, the leading shared ownership portal, dedicated to working with shared ownership applicants and with the affordable home sector.
You’ll find a diverse portfolio of properties in the likes of Harrow, Greenwich, Denham and other London suburbs. So if you require more details on shared ownership in London or in general contact them at www.propertybooking.co.uk
There is also a dedicated official affordable homes portal – london.gov.uk/homes – which is powered by Property Booking on behalf of the London Mayor’s office. The site is a mine of information about shared ownership schemes across the capital.
Yes, but I live further afield…
Not to worry, there are many properties across the UK which are outlined on the Property Booking portal.
There are also, for example, houses for sale in Tunbridge Wells that are available for shared investment. If you click on Moathomes you’ll find details of 4 one-bedroom and 6 two-bedroom apartment options available through Moat’s shared ownership scheme.
Where do I go from here?
Firstly assess your financial position and then get in touch with the likes of Property Booking who can provide you with excellent advice and guide you through the process. And you’ll be one step forward in the pursuit of your property dream.