There are a few different ways to buy a home, so if you’re considering your options right now, shared ownership may be something you’re currently exploring. Buy what is a shared ownership property and what should you consider before buying one. Here, you’ll find some of the top considerations to keep in mind when thinking about buying a shared ownership property.

First, let’s dive deeper into what a shared ownership property is. Buying a shared ownership property means that you are purchasing a portion of the property rather than the entire home. The share you purchase is usually 75% or less of the property’s value. You will then pay rent on the remaining portion of the property, and this will stay under the ownership of the housing association. You can purchase increasingly bigger percentages of the property, known as staircasing, until you own 100% of your home.

Here are some of the points to consider when buying a shared ownership property:

How Much Can You Afford to Spend?

Speaking to an independent financial advisor to get some unbiased advice on the amount you can borrow is a first step that many people take when planning to buy a property. If you’re hoping to buy a shared ownership home, you may also find it helpful to use a shared ownership calculator to assess how much you could possibly spend on a property, and the percentage of the property that this would buy you.

When thinking about the affordability of a shared ownership property, it is also essential to take into account the amount you will need to pay in rent. You will need to be able to afford to pay both the mortgage on the portion of the property that you own and rent on the portion of the property owned by the housing association.

Do You Meet the Eligibility Criteria?

A shared ownership property isn’t something that everyone is eligible to buy. You need to meet a range of criteria to be approved for a shared ownership property, this includes:

• A household income of £80,000 or less (or £90,000 or less if you live in London).
• Be a first time buyer, or have owned a house in the past, but unable to afford one now.
• You need to move to a house that meets your needs, but can’t afford a mortgage and deposit to make that possible.

Can You Afford the Additional Costs?

There are a few additional costs that you need to consider when buying a shared ownership property. These extra costs include stamp duty to pay on your mortgage, rent charges for the portion owned by the housing association, and the service charges you may need to pay on the property. You will also need to consider the legal costs of your shared ownership property purchase.

Final Thoughts

Purchasing a shared ownership property can be an ideal way to get onto the property ladder, but just ensure you’re aware of the top considerations before you commit.

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