Shared Ownership Mortgages

Shared Ownership Mortgages with Manchester Money

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Shared Ownership Mortgages Manchester

Last updated: 15th February 2024

Shared ownership mortgages offer a pathway to homeownership for individuals or families with limited income or savings. This type of mortgage arrangement has gained popularity in the UK as a means of making homeownership more accessible. By enabling buyers to purchase a share of a property and pay rent on the remaining portion, shared ownership mortgages provide an opportunity to step onto the property ladder with a more affordable upfront cost.

What is shared ownership?

Shared ownership is a scheme that allows you to purchase a share of a property, typically between 25% and 75%, while paying rent on the remaining share that you don’t own. This scheme is typically offered by housing associations, although some private developers also offer shared ownership schemes.

How Does Shared Ownership Work?

Under a shared ownership scheme, you would typically buy a share of the property, and then pay a mortgage on the share that you own, and rent on the remaining share that you don’t own. The rent on the remaining share is typically set at a below-market rate, making it more affordable for you. You will also be responsible for paying any service charges or maintenance costs associated with the property.

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Can I buy more shares in the property later?

Yes, you may be able to increase your share in the property through a process called “staircasing”. This involves buying additional shares in the property until you own 100% of it. The cost of buying additional shares will depend on the current market value of the property at the time you wish to staircase.

What Are The Benefits Of Shared Ownership?

Shared ownership can be a good option for people who want to get onto the property ladder but can’t afford to buy a property outright. It can also be a good option for people who don’t want to commit to a full mortgage or who want to try out living in a property before committing to buying it outright. Additionally, shared ownership schemes often come with eligibility criteria that can make it easier for certain groups of people, such as first-time buyers or key workers, to buy a property.

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What are the potential drawbacks?

There are several potential drawbacks to shared ownership, including:

You will still need to pay rent on the portion of the property that you don’t own, which can be an additional expense.

The process of buying additional shares in the property can be complex and expensive.

You may be subject to certain restrictions, such as not being able to rent out the property or make significant alterations to it without permission from the housing association or developer.

You may have to pay service charges and maintenance costs, which can be higher than for a comparable property that you own outright.

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How do I apply for a shared ownership mortgage?

To apply for a shared ownership mortgage, you will typically need to go through a housing association or developer that offers shared ownership schemes. You will need to meet certain eligibility criteria, such as being a first-time buyer or key worker, and you may need to have a certain level of income or savings. You will also need to go through the standard mortgage application process, which will involve a credit check and affordability assessment. If you have any questions, please don’t hesitate to get in touch.

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Shared Ownership Mortgages