Buy a home in 2024 sooner than you expected with shared ownership

Shared ownership can be a great alternative to renting or outright purchase for those that can’t currently afford to pay the full price to buy a property, and yet it’s often overlooked, misunderstood and misreported.  

In simple terms, you buy a percentage of a leasehold property – either outright or with a mortgage – and then pay rent on the rest to the housing provider. You then have the option of buying more of the property over time, known as ‘staircasing’ (usually up to 100%).

As specialists in the sector, our team at SOWN are here to guide purchasers through their shared ownership journey. Our dedicated staff will work with our in-house financial team arrange eligibility and affordability checks for you; helping you understand exactly what type of home is affordable and sustainable for you.

You could get a good deal on a re-sale property in 2024

Many shared ownership properties are ‘re-sales’ – existing occupied homes that are up for sale on the open market whereby a current leaseholder is looking to sell their share and move on. Listings for re-sales will highlight some key things to know:

1. How much of the property will you own as a minimum. This is typically between 25% and 75% under the old Shared Ownership model (the new model offers from 10% to 75% initial shares*).
2. What deposit will be required for a mortgage. This is based on the percentage you own, so will be a lot less than you would pay if you were buying the whole property. Usually (subject to lender approval and financial checks) you can secure a mortgage with just a 5% deposit of the advertised share.
3. What service charge you will pay and how many years remain on the lease. This can vary depending on the property.
4. The amount of monthly rent you’ll pay to the housing provider for the remaining % share you don’t own.
5. Does the property still have a build warranty (NHBC or equivalent) on it.

As property prices haven’t moved much this year and some have fallen, you could get a good deal over the next 12 months if you buy an existing shared ownership home.

If you would like to have the security of your own home without the huge upfront deposit costs - especially if the alternative is renting long term - then do take a look at shared ownership, as it could be a great move for you in 2024! To find out more, just get in touch with our experts at SOWN.