What is Shared Ownership?
Shared Ownership can help you get on the property ladder faster than you might have thought. It also offers you a range of benefits. Buying a part of your home and renting the rest is a great way to start out.
Shared Ownership offers you the chance to build equity for the future, enjoy the benefits of living in a home you can decorate and fit out to your style and feel more secure and settled for the long term. Once you decide you want a change you can either buy more shares or sell the share you have.
Shared Ownership Explained
Shared ownership is a way you can own your own home. Buying a part and renting the rest is a simple and manageable way to start out on the property ladder. So, what does ‘shared ownership’ mean? When buying a shared ownership home, initially you can buy anywhere between 10% and 75% (check with your sales advisor for details) of the home. As an assured tenant you will pay a subsidised rent on the percentage you don't have a mortgage on until you choose to increase the share you buy to 100%.
What does 'part buy, part rent' mean?
Shared ownership is sometimes called ‘part buy, part rent’ which means is that you buy a share, while you rent the rest of the property.
For example:
You buy a 40% share of a £150,000 property, so your share is worth £60,000. The rent is charged at a rate of 2.75% on the £90,000 share that is owned by the social housing provider (Sage Homes, of course!). This would mean your rent is £2,475, spread over the year, so £206.25 a month.
If you've borrowed money to fund buying your share of the property you will also make mortgage repayments on top of this rent. If you'd put down a 5% deposit, you'd need to make repayments on a £57,000 mortgage. Take a look at our affordability calculator to see what you could be paying every month to get your foot on the property ladder.
Why should I buy a shared ownership home?
There can be many advantages of shared ownership. It can enable you to get onto the property ladder more quickly than you might if you were buying a home outright. You can buy additional shares as time goes on meaning you save more or pay off more of your mortgage. It may be cheaper than renting (but not always).
Affordability Calculator
Not sure what you can afford to buy with Shared Ownership? We'll help you work out the costs with our handy affordability calculator tool.
Can I..... Questions about your new home
You are in! Now you can decorate and make yourself comfortable. If you have questions about buying more shares, reselling or anything else, we have answers for you.