Shared ownership is one method to get a foot on the first rung of the ladder, which has become more challenging to climb as real estate prices continue to rise. Shared ownership may seem simple in theory, but it cannot be easy. This article explains how the program operates in Canterbury, who is eligible to participate, and what to watch out for.

Shared Ownership.

Shared ownership is a different homeownership program that enables first-time purchasers and people who do not already own a home to buy a stake in a newly constructed or resold property.

Housing organizations like Moat homes administer shared ownership programs, allowing you to take out a mortgage on a piece of property that ranges from 25% to 75%

 and pay rent on the remaining section.

The money needed for a deposit is frequently substantially lower than buying a house altogether because the buyer requires a mortgage for the portion they own. As a result, you won’t need as much of a mortgage as you would if you were to buy the house.

Shared Ownership is Not Only Applicable to First-Time Buyers.

First-time purchasers are among the various persons qualifying for joint ownership. A first-time buyer has never bought a property in the UK or overseas. However, some banks may also classify you as a first-time buyer if you haven’t purchased a home in the last three years.

Existing shared owners, or those relocating from one shared ownership property to another, are also eligible for shared ownership, as are former homeowners currently attempting to climb back up the housing ladder.

When you apply, you’ll probably need to show that you can’t buy a home that meets your needs on the open market, though exact qualifying requirements vary by property and area. You must also have a clean credit history and be clear of any outstanding debts, including rent or mortgages.

Beware of Leasehold Costs.

Additionally, leasehold properties are subject to fees that would not apply to freehold buildings. Be aware of these costs because they typically apply to properties with shared ownership as well:

  • A service fee is used to maintain and fix common facilities like corridors and gardens. For instance, each flat owner in a building might contribute a specific sum to a “sink fund” used to maintain common spaces like stairwells. This money is not used to pay for repairs to your actual property.
  • Ground rent is often an annual payment made to your freeholder (the person who owns the freehold on every leasehold property).

Staircasing Options

You might find yourself in a position in the future where you’d like to or could afford to purchase a second share of your property. You might decide to raise your ownership percentage, for example, from 50% to 75% or from 75% to 100%. Staircasing is the practice of purchasing additional shares.

The Bottom Line

Shared ownership in Canterbury is easier to achieve than full property ownership and is also preferable to renting.

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