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Money Matters: Everything You Need to Know About Shared Ownership Schemes

Money Matters: Everything You Need to Know About Shared Ownership Schemes

Jun 29, 2014

Getting on to the property ladder can seem like an unrealistic dream. Since the financial crisis of 2008, an increasing number of people are renting properties in a bid to assert their independence. However, mortgage rates are still high, and more young people are finding it difficult to get onto the first rung of the elusive property ladder.

One of the biggest hurdles that first time buyers face is saving the initial deposit. If you have a severe lack of savings, then getting on the property ladder can be difficult. However, there are many things in place that can help you take the lofty leap into home ownership. Have you considered shared ownership schemes?

Shared ownership schemes are ideal for those that are struggling to become first time buyers. You will own part of the home and rent the rest from a housing developer.

If you have a smaller deposit, that is lower than what the bank would normally request, this may result in a lesser mortgage from your bank. This is where shared ownership schemes are becoming more popular. You can own part of your property with a shared ownership scheme, meaning that you have taken an all important step into becoming a partial home owner.

Of course, this scheme is not without its downsides. Shared ownership schemes mean that you never entirely own your home outright. You only own part of it. Shared ownership is as the name implies. The other part of your property that you do not own will belong to the shared ownership provider. They may allow you to buy the rest of your property at a later date. This is known as the remaining equity.

Shared ownership schemes are not available on all properties. They are only applied to certain properties that are new developments or have been subject to scrutiny from a local authority. Of course, you should always seek the advice of an estate agent in your locality. A simple Google search stating estate agents, and your location, will retrieve a plethora of results. For example, you could search for estate agents in Chelmsford to find relevant organisations within Essex.

With that in mind, your choices of property may be dictated by eligibility within the area. Yet, if you are willing to move, your housing options will be vast. Sticking to one location, or your hometown, may result in your application being rejected for your shared ownership scheme. This is due to the high demand of these types of properties.

The great thing is, is that shared ownership schemes are easy to seek out. All you need to do is find a property that you love and apply for a grant to buy it. The process is easier than buying a property outright. If you do not want to become a part of a chain, shared ownership schemes are the perfect solution for you.

While the current market is tough, it is getting better. Furthermore, there are a plethora of useful government incentives to help first time buyers.

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Andrea Allen

 

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