Shared Ownership Myth Busting

You’ve been looking into Shared Ownership and think it might be the right scheme for you… but then you hear some things on the grapevine that unsettle you.

There’s no family homes, just tiny starter flats. It’s impossible to get a mortgage and even if you do, you’ll have to share your new abode with someone. You don’t own the home, plus you’ll never be able to sell!

However, this really isn’t the case! Our Shared Ownership myth busting looks at the biggest misconceptions surrounding the scheme to help you make an informed decision on your home buying journey.

Myth: Shared Ownership means that I have to share my home with someone.

Truth: The Shared Ownership scheme enables you to buy a share in a property, paying a mortgage on the share you own and rent on the remainder to a housing association; you don’t have to buy or share your home with anyone that you don’t want to! In most cases, you can also choose to purchase more shares in your property until you own 100% and become the sole owner.

Myth: It’s only available to first time buyers.

Truth: While Shared Ownership is a great stepping stone for first time buyers who are looking to get a foot on the property ladder, it isn’t just available them. As long as you meet the eligibility criteria, and you do not own another home (or you’re in the process of selling your current property), the Shared Ownership scheme is open to anyone over the age of 18.

So whether you’re a first time buyer, upsizer, downsizer or anything in between, Shared Ownership is still an option!

Myth: You’re still renting, so you can’t even decorate your home.

Truth: One of the biggest attractions of buying through Shared Ownership is that you are the homeowner and have full right to decorate as you wish. Whether you want to paint each room a different colour of the rainbow or create a feature wall out of your favourite artwork, it’s completely up to you!

However, there are certain structural improvements that you would need to gain permission for from your housing association, such as fitting a new kitchen or bathroom suite, or adding an extension to your property.

Myth: It’s more expensive as I have to pay rent and mortgage every month.

Truth: In many cases, the monthly payments for a Shared Ownership property is less than renting privately, just with the added benefit of owning a stake in your home!

With Shared Ownership, you pay a mortgage on the percentage share that you own and a below-market-value rent on the remainder to a housing association. It’s also worth noting that if you choose to buy more shares in your home, your mortgage payments will increase but your rent will decrease in turn.

Myth: You can’t buy family homes, only tiny apartments.

Truth: With Shared Ownership homes available up and down the country, and with so many providers building these homes, it’s only right that the scheme offers a good mix of properties. From studio apartments, one and two bedroom flats, to three and four bedroom houses, there’s something for every buyer.

Myth: I still can’t afford the deposit.

Truth: The great thing about Shared Ownership is that you only need to raise as little as a 5% deposit of the share that you are purchasing.

For example, if you were to purchase a 25% share of a £250,000 home – equating to £62,500 – your 5% deposit of this would be just £3,125! In comparison to buying a home on the open market, Shared Ownership deposits are generally much cheaper.

Myth: You never actually own your own home.

Truth: Once you’ve moved into your Shared Ownership property you are able to buy more shares through a process known as staircasing. This will increase the share of the property you own and decrease the rent you pay. In most cases, you can go on to buy 100% of your property and become the outright owner.

Myth: It’s impossible to get a Shared Ownership mortgage.

Truth: Not all lenders will provide mortgages for Shared Ownership, but most will! Plus, all mortgage lending is calculated on a similar affordability calculator, which means it comes down to your income, outgoings, credit rating and the size of your deposit – the same as if you were buying on the open market.

Want to know more about the different Shared Ownership mortgage options? Check out our free mortgage calculator today to see the mortgages available to you based on your individual circumstances.

Myth: You can’t sell a Shared Ownership home.

Truth: For some customers, Shared Ownership is a stepping stone towards 100% ownership and for others, as circumstances change, they may wish to sell their home.

When you want to sell, you need to contact your housing provider to let them know. As there are often long waiting lists for Shared Ownership homes, your provider will then have a set period of time (as outlined in the terms of your lease) to try and sell your home to other buyers who are looking to purchase through the scheme. After this time, you will be able to advertise the property yourself, selling privately or through an estate agent of your choice.

Share to Buy is a one stop shop for affordable homes. On our website, you can search for propertiescompare mortgages, and find out all you need to know about alternative home buying schemes using our FAQs and guides.

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