shared ownership scheme

Why A Shared Ownership Scheme Maybe A Good Idea For First Time Buyers

Purchasing your first property can be a big step to take, and with so many options to choose from in order to get on the property ladder, it can get a little overwhelming. Shared ownership schemes are a pretty popular alternative to purchasing a property outright, and can be a great opportunity for many individuals who are looking to buy on the open market. Here are some reasons why first time buyers should consider a shared ownership scheme:

It provides an easier way to get onto the property ladder

Purchasing a property on your own can be quite costly, especially if you consider all the solicitor fees and mortgage-related costs. However, the shared ownership scheme is a brilliant way to provide you with the stability of becoming both a shared owner and occupier of the property you opt to purchase. Deposits are also generally lower than buying on the open market, so you don’t have to worry about saving a huge amount of money before looking to get onto the property ladder.

It allows mortgages to be more accessible

When opting to purchase a property using a shared ownership scheme, banks can be more lenient so don’t let your low income put you off! A shared ownership mortgage requires a good credit score, however, if you are lacking this, try utilising the services of a mortgage broker and/or mortgage advisors so that they can offer you the right advice and support for being accepted.

It offers cheaper monthly repayments

The shared ownership scheme offers cheaper monthly repayments compared to standard mortgages, and rent payments are also deemed to be more affordable in comparison to leasing a home from a private landlord. Furthermore, if you feel as though you’re in a better financial position, you can choose to purchase more shares of your property over time through the process of ‘staircasing’ until you own the property fully. When you own the property fully, this means you will no longer need to pay rent, which is a win-win situation!

It may provide exemptions on Stamp Duty Land Tax

Usually, when purchasing a property above a certain value, buyers are liable to pay a tax. However, when purchasing a property on a shared ownership scheme, you may become exempt – be sure to discuss this with your solicitor and read through the contract just to be sure, as it’s sure to save you a fair bit of money.

It grants security of tenure

When purchasing a property using the shared ownership scheme, it can provide a security of tenure for the buyer for as long as your lease states – this is normally 90+ years! As long as your rent and mortgage payments are paid on time, you don’t have to be worried about being vacated out of the blue!

On a final note, we’ve all seen the rising costs of living and an increase in property prices, which has left many of us concerned about if we will ever even get onto the property ladder. However, with the shared ownership scheme, the whole process of purchasing your first home and gaining some stability in your life, has never been easier!

Until next time.

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