Shared ownership has become an increasingly popular option for first-time homebuyers. This scheme allows individuals to purchase a portion of a property while paying rent on the remaining portion. While shared ownership can provide a foot on the property ladder for many, it’s important to weigh the pros and cons before making any decisions.
Pros:
Affordability: Shared ownership allows first-time buyers to purchase a portion of a property, which can make owning a home more affordable. As the initial deposit is only required on the portion you own, it is often less than a traditional mortgage. This can make it more accessible for those who are struggling to save up for a large deposit.
Stability: As a shared owner, you have a stake in the property and can treat it as your own home. This means you can live in the property for as long as you wish and have more stability than renting.
Opportunity to build equity: As you pay off the mortgage on the portion of the property you own, you will build up equity. This can be beneficial when it comes time to sell the property.
Cons:
Limited selection: Shared ownership schemes are not as widely available as traditional mortgages. This means there may be a limited selection of properties to choose from in desirable locations.
Additional costs: While shared ownership can be more affordable initially, there are additional costs to consider. These include service charges, rent on the portion of the property you do not own, and potential restrictions on how you can decorate or alter the property.
Difficulty in selling: When it comes time to sell your shared ownership property, you may face difficulties. As the property is owned by multiple parties, it can be more complicated to find a buyer who is willing to purchase the shared ownership portion.
Shared ownership can be a good option for those who are struggling to save for a deposit and are looking for an affordable way to get onto the property ladder. However, it’s important to carefully consider the pros and cons before making a decision. While shared ownership can provide stability and the opportunity to build equity, there are additional costs to consider and a limited selection of properties available. If you'd like some help assessing your options when it comes to shared ownership, get in touch with us today.
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