Monday, 7 December 2015

Guest Post - A Guide To Shared Ownership

Whilst I'm moving home, I've asked some lovely blogging ladies to fill you in on all things housey!

Next up is Rhian Westbury and everything you need to know about shared ownership. It can be really hard to get onto the property ladder and this can be a great starting point as Rhian explains:

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Just over three years ago I moved into a shared ownership property. When I tell people about my property a lot of them look confused when I mention shared ownership, or just don’t understand how it works so I thought I’d fill you all in about it.

What is a shared ownership property?

A shared ownership property is a property which is part owned by you through a mortgage, and part owned by a housing association or another party.

Why do you want a shared ownership property?

I chose to get into shared ownership because property prices are so high it is incredibly difficult to get on the property ladder regardless of your age. I was a single girl who was fed up of renting (although I only did it for a year) and to live on my own my options to buy somewhere where I had to earn a stupid amount of money to get a large mortgage, or I needed a deposit of about 75% of the property which wasn’t going to happen (esp just outside London where I live!). Because a shared ownership property is only partially yours you need a much smaller deposit and a smaller mortgage which makes it more manageable.

How much does it cost?

Generally with shared ownership properties you will own slightly under half of the property (for me it’s 45% but it can be as low as 25% in Central London) and the housing association owns the other proportion. Because of this you will pay a monthly mortgage for your part and monthly rent to the housing association for the half you don’t own. With some properties (mainly flats) there is also a service charge for things such as grounds maintenance, communal electricity, lift maintenance etc. This might sound like a lot but monthly I pay very little more for my 2 bedroom shared ownership property as I did for renting a 2 bed flat (which was horrible!)

If you are thinking shared ownership is the way forward you will need a little bit of spare money alongside your deposit for solicitors fee’s and other small costs. For example I had to pay a financial advisor to go through mortgage stuff and paperwork (although this was well worth it!)

Who decides on what percentage you can buy?

Generally the housing association will choose how much you can buy and when you first begin you will have a lower percentage of the property than the other party. After a few years should you be able to you can increase your share should you want to but every property has different rules. With shared ownership you can’t get a property if you earn enough to get a full property so in theory you won’t earn enough for more shares.

Are there any negative aspects?

The only negative I can think of is the fact that you still have to pay rent so you are ‘wasting’ a little money, but people only do it when there’s no alternative so if you have a shared ownership property you won’t have a choice. I’ve heard the properties can take a little longer to sell as well because you get a share alongside the housing association, but i’ve yet to come to this point yet (maybe ask me again in 10 years).

How do I find shared ownership properties?

I was very lucky because I spotted a block of new-build flats and saw the advertisement there but there are so many websites where you can view shared ownership properties in your area. These properties go very quickly (a set by me sold out before the building work was finished!) so it is very much about being in the right place at the right time.

Are they really worth it?

100% yes. I have been in my property just over three years and love it. I have my foot on the property ladder, collateral in a mortgage which can be paid off/ put towards another property later in life and it’s so much nicer than renting. Shared ownership properties tend to be new/newer buildings so for example with my flat I was the first person to move in which was great. I have been able to decorate which is something I could never have done in rented accommodation and the earlier you get on the property ladder the quicker you may someday pay off your mortgage!

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