What is shared ownership?

Contrary to what it sounds like Shared Ownership doesn’t mean that the homeowner will be physically sharing their property with anyone else (although some do choose to). Established back in the 1980’s – a time of soaring house prices – it gave people who would otherwise be excluded from home ownership the chance to buy a share of a property. Typically most schemes are offered through Housing Associations with the property being within one of their existing developments or obtained on the open market. The homeowner buys a share of the property – anything from 25% to75% – and pays rent on the remainder. So, Shared Ownership is a viable, tried and tested option. But what are the advantages and disadvantages?

The Main Advantages of Shared Ownership:

• Greater independence, control and choice in terms of where you live
• Long-term security – like any other homeowner you can choose how long you live in your home, this could be for the rest of your life.
• It can cost less than full ownership.
• Depending on the lease the Housing Association may be responsible for repair and maintenance – always check that they’re able to provide this service.
• Family money can sometimes be used to help buy the property.

The Main Disadvantages of Shared Ownership:

• Shared ownership isn’t available in all areas of the country.
• There are some initial costs involved in buying the property including survey, mortgage arrangement, lender costs and solicitor’s fees –– these are currently around £4,000 (September 2011). Buyers now also need some significant financial resources or support behind them to ensure that they can contribute to their mortgage payments each month for the duration of the mortgage.