Shared Ownership Mortgages
Mortgages come in all shapes and sizes, with shared ownership mortgages giving first-time buyers a more affordable way to get on the property ladder. If you’re interested in shared ownership, here’s some expert advice from our qualified and experienced mortgage advisers.
What is a shared ownership mortgage?
A shared ownership mortgage, which is sometimes called a part-buy and part-rent mortgage, allows first-time buyers to buy a share in a new build property. Rather than owning the entire house, your mortgage will cover the room(s) that come under your share.
The share taken out is usually between 25% and 75%, although since April 2021 the minimum share has been reduced to just 10%. You then also pay rent for use of the communal rooms (kitchen, bathroom, lounge etc) to a housing association. Seeing how your mortgage is only for a share of the property, your deposit doesn’t need to be as large and your monthly payments will be smaller compared to buying a home in its entirety.
Maintenance and repairs are covered
Another major benefit of a shared ownership mortgage is that the maintenance and repair costs are paid by the landlord for the first ten years. This was introduced in April 2021 and makes shared ownership even more affordable and hassle-free.
Do I qualify for a shared ownership mortgage?
There are a few criteria that you need to meet in order to take out a shared ownership mortgage:
Staircasing a shared ownership mortgage
Shared ownership mortgages are very flexible, as there’s the option to buy a bigger share in the property further down the line. Additional shares can be purchased in 1% instalments, making it very easy to increase your share if your fellow owners are happy for you to do so.
Please note that you will need to have the property valued by a RICS surveyor and then contact your housing provider to start the process. You will also need to instruct a solicitor to act on your behalf.
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