Shared Ownership Mortgages - The Basics
In a world where escalating property costs are preventing many first time buyers from purchasing their first property, numerous schemes are now being developed, within both the public and commercial sectors, to allow individuals to purchase a property that they would not otherwise be able to afford.
What is Shared Ownership Mortgage
Shared ownership mortgage allows an individual to purchase a percentage of the property, such as 25 percent or 50 percent, and to pay rent on the remaining portion. This way, an individual is able to begin the process of owning their own property and reducing their monthly bills whilst still being able to obtain the necessary mortgage.
Shared Ownership Vendors
Most shared ownership properties are available to purchase from a housing association, with the remaining percentage of the property's value being paid for through a monthly rental payment. Apart from housing associations, some commercial vendors have also spotted the potential in the shared ownership market. They are now offering shared ownership style schemes in order to encourage those who would not necessarily be eligible for housing association properties to consider this method of purchasing a property, which they would not otherwise be able to afford.
Types of Properties Available For Shared Ownership Mortgages
Although the vast majority of properties offered on a shared ownership basis are from housing associations and are, therefore, housing association properties, which are normally flats or terraced properties in more populated areas, there are some commercial companies now offering properties for shared ownership.
With commercial companies, the choice of property is likely to be more varied, possibly in less populated areas or in other more rural areas. Of course, with a commercial company, the terms are variable and prospective purchasers will have to make further enquiries, on an individual basis, as the process is not regulated centrally by government.
Shared ownership is a scheme whereby a purchaser can buy a share or a part of a property and pay rent on the remaining portion;
most shared ownership schemes are offered through housing associations; but
more recently, commercial companies are also offering shared ownership property in a bid to attract more potential purchasers.