All you need to know about shared ownership
We are very pleased to be able to offer a selection of shared ownership homes across the Borough of Croydon – currently available are apartments at Flora Court in Thornton Heath and Auckland Rise in Upper Norwood; our homes at Heathfield Gardens in central Croydon will be launching very soon.
Shared ownership is a great way for first time buyers to get on the housing ladder. But shared ownership can be confusing. Recently conducted research revealed that “members of the public do not always understand exactly how shared ownership schemes operate, or the precise nature of the legal arrangement which the purchaser of a shared ownership property is entering into”.
That’s why we’ve appointed specialist sales agents So Resi, who were behind the research, to market our homes for us. We’ve asked them to to answer some of the most common questions surrounding shared ownership:
What is shared ownership?
Put simply, it’s a way to help more people become homeowners. With shared ownership, you buy a share of your home – usually between 25% and 75% – with a lower deposit, smaller mortgage and monthly payment on the rest.
Your mortgage and deposit are just on the share of the home you buy, so they are lower than if you bought the traditional way. You also make a monthly payment for the share you don’t own, and pay a service charge which goes towards the cost of looking after your building or development.
You can then buy extra shares over time through a process known as staircasing, and eventually own 100% of your home in future.
Whilst first time buyers are the most common shared ownership purchaser, the scheme is also available to those looking to get back onto the property ladder.
What steps can I take to improve my chances of getting a mortgage?
If you are planning on buying a home, it’s important to get your finances in check as early as possible. Try to reduce the amount of outstanding credit you have, make sure you are on the electoral role, and close down any credit cards that you are no longer using. To make your finances go further, get smart with your savings – putting your cash into a Lifetime ISA will mean that for every £100 you save, the Government will boost this by £25.
With shared ownership, deposits start at just five per cent of the share you buy, so it’s a much more accessible way to get onto the property ladder. For example, at Brick By Brick’s Flora Court development which recently launched, a five per cent deposit for a one-bedroom apartment starts from just £3,750 [based on a 25% share].
What exactly does ‘shared ownership’ mean?
One of the most common misconceptions about shared ownership is that you have to share your house with someone – which is absolutely false. It is called shared ownership because the ownership of the property is shared between you and your housing association. You own a share of the property (typically between 25% and 75%), and as and when your funds allow you, you can purchase more shares through staircasing – meaning that you can eventually own 100% of the property if you wish to.
Is shared ownership more expensive than renting?
In many cases, shared ownership can be less expensive than renting a home when comparing like-for-like. Although your monthly cost will include mortgage, rent and a service charge, when added together this is still generally lower than the cost of rent – and you have the added security of owning a slice of your own home.
How can I find shared ownership homes?
Just visit the Available homes section of our website to see which shared ownership homes are available. To find out more about our shared ownership homes, contact SO Resi – visit www.soresi.co.uk or call 020 8607 0550.