Shared ownership is a scheme also known as "part-buy and part-rent" which allows you to buy a share of a property and rent-out the remaining share. It was created for people who want to start investing in the property market but have little deposits to put upfront as down-payment.
You buy a property stake between 25% and 75% from the available properties in the housing association (a not-for-profit organisation that supplies housing). You can then pay rent of up to 3% on the remaining share.
The process is called 'staircasing', it applies once you have received your share of the property. An agreement must be arranged by the housing associates if you want to buy more shares.
Firstly, finding a local “Help to Buy” agent who will help you throughout the process. You can find one from the government's “Help to Buy” website.
Your application will or should be assessed within around four days. Once your application has been approved, you can begin to look for your shared ownership property with the assistance of your Help to Buy agent.
You can start booking properties to views with the relevant housing association. Once you've found a shared ownership property you want to live in, you'll need to put down a reservation fee. It's typically £200 but could vary.
Although you would have already shared some financial details when applying for the scheme, you may still need to do a full economic assessment with the housing association. An independent financial adviser will carry this out.
Shared ownership property can be a great way of becoming a beginner property investor, but it's not the ideal solution for everyone. Here are some of the pros and cons.
As much as getting shared ownership can be difficult, our mortgage consultants can help you find one. Visit SmartMortgagesUK for more info.