What are the benefits of Shared Ownership?

Security

Shared Ownership is a way for you to experience the security of owning a home on a lower budget, without the risk of being evicted without good reason.

Until such time as you own 100% of your home, the property will be leased to you.

The lease document clearly tells you your rights and responsibilities as a Shared Owner.

You will have sight of your lease prior to exchange of contracts and your appointed conveyancer will check it for you and be on hand to answer any questions you may have about terms within the lease document. You should carefully read the lease document before signing it.

Your Shared Ownership lease will help you to plan for your future. It will outline how you can buy further shares in your home over time, redecorate, and make adjustments to your home without worrying about stepping on a landlord’s toes.

Affordability

When buying a home through Shared Ownership, and particularly if you are buying a share of 50% or less, you can normally expect the deposit required to be substantially less than if you bought a home outright. This is because the deposit is determined by the size of the share you’re buying and not by the total value of the property.

A 50% share of a property worth £200,000 would cost you a deposit of at least 5% (£5,000), as opposed to a minimum of over £20,000. This makes Shared Ownership a great way to get a foot on the property ladder without having to spend years and years saving.

What’s more, with Home Reach you can expect to find lots of different sized Shared Ownership homes in various locations across England, providing you with the opportunity to buy a property in an area you may have once deemed unaffordable.

Head over to our dedicated guide to find out more about the price of Shared Ownership rent and deposits.

Freedom

Shared Ownership gives you the freedom to make home improvements, such as painting and decorating, whilst rented properties often restrict your ability to do so, making it feel like the property doesn’t really belong to you. Shared Ownership is a definite step up from standard rental agreements, allowing you to decorate and transform existing spaces in a way that reflects your own tastes.

Home improvements such as these can also add value to the share of the property you own – yet another of Shared Ownership’s advantages.

Pets

Pets are an important part of many of our lives, and the restrictions on rental properties can be a struggle for individuals and families with companions. Provided the site rules of the property permit it, we do all we can to ensure that homes bought under Shared Ownership with Home Reach enable you to have pets.

Budgeting

For generations, house buyers have been restricted by the size of their budgets. In the current era, house prices have tended to outpace inflation and wage growth, and many feel like the property ladder has been yanked from under their feet. Shared Ownership is a great way to get back on track when you have a smaller budget, and have the ability and flexibility to buy more shares in your home as you progress in your career.

With Shared Ownership, your budget determines the share of the property you purchase, with the option to increase your share at any time through a process called staircasing.

Staircasing

Staircasing is the process by which you buy more shares in your home over time. When you reserve your home the initial share you buy will be up to 75%, and the exact percentage is determined by your affordability.

Once you move in, you’re free to buy more shares in your home until you own 100% of it, at which point the freehold is usually transferred to you.

There are two types of staircasing:

1.        Interim staircasing (buying more shares in your home but at which point you still do not own 100% of all shares)

2.      Final staircasing (the purchase of shares that means you own 100% of all shares)

Don’t forget that there are some costs associated with staircasing including solicitors fees, valuation fees, mortgage fees and administration fees paid to your landlord. There may also be Stamp Duty owed. Speak to your landlord’s dedicated staircasing team to understand the costs involved.

Shared Ownership offers a flexible and practical path to home ownership, and offers security and stability when compared to privately renting. While there are costs involved, your lease document will clearly specify these, including any annual prices rises meaning there is transparency in the costs you pay.  No matter what your homeownership goals are, there are many benefits of buying a Shared Ownership property in the current housing market. Read our guides to find out more about how Shared Ownership can help you climb the property ladder.