Shared Ownership: What The Heck Is It?

Posted in Lifestyle
rainbow house

Just over three years ago I handed over thousands of pounds to a housing association, signed a mortgage deal and moved into a beautiful two bed flat which is all mine. When I tell people I do shared ownership a lot of people looked at me with confused faces and don’t quite understand what it is so I thought i’d dedicate this blog post to explaining the basics behind it.

In simple terms what is shared ownership? 

Shared ownership is part renting and part owning a property. In a time where property prices are so high you either have to be in a couple/ group, or be earning serious mega bucks in order to get your foot on the property ladder. And don’t get started about London prices.

Renting can be seen as many as throwing away money (hence why I upped from my rented flat within 11 months). Shared ownership see’s you get a mortgage on part of the property and a housing association owning the other part. The percentage you get will generally always be under 50% to give the other party the ‘larger’ chunk, but you can choose to up your side in the future in a lot of properties.

For example with my property after my deposit and mortgage I own 45% of my property where I pay a monthly mortgage to the bank (eurgh!) And then the housing association owns the other 55% so I pay rent on that part of the property. For some properties in say Central London your proportion may be as little as 20% but this depends on the overall property price.

So you pay a mortgage and rent? 

Yes I pay both, but added together this was the same price as just renting a similar sized/ priced property and this way I am building up my pot to put towards a larger/ bigger property in the future, and i’ve got my foot on the property ladder.

How did you find a shared ownership property? 

For me it was very much being in the right place at the right time. Shared ownership properties tend to be new builds rather than older properties and there are so many being built at the moment. A quick Google search will show you properties or developments in your area but I saw mine by driving past and seeing a sign. From seeing the sign and deciding to initially have a look to getting my keys and moving in was about three months max.

How was the process so quick? 

The great thing about it was the fact that I had no chain. I did not have a property to sell so could move straight in, and because I was going into a new build they didn’t have someone trying to sell. Obviously if you move into a property which already has someone in it might take a little longer, but generally it can be quicker than going through a full mortgage process.

The thought of mortgages scares me a little…. 

It scared me to begin with, but shared ownership properties tend to require you to get the help of a financial advisor. My financial advisor was great he went through all the paperwork with me and explained all the different mortgages to me as I had no idea the difference between a tracker or a fixed mortgage. Last month I had to renew my mortgage as I had scarily been there for three years (where does the time go?) and it all started to make sense: yay!

Are there additional costs in shared ownership properties? 

As well as your initial deposit you will need a few grand spare for solicitors costs, financial advisor costs and some other things which you are required to get. But in the grand scheme of things it’s worth it to get your own property.

Do you have any questions about shared ownership? Are you in a similar property?
November 18, 2015
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  • So what happens if the other partner pulls out, do you have to pay their share? Or does someone else take over?
    Also, what about if you come into enough money to buy the house out right, who do you pay the money to, are you allowed to?
    Can you add some more of the negatives so I can see both sides, what's good and what bad about it? Have you had/heard of any problems?

    – Just curious, I need to move and I just can't find anywhere reasonable being so close to the second city (Central Birmingham) It's just too expensive! I've heard of some local shared houses though x

    Amy. Purely Amy.

    • The partner is a housing association so they wouldn't pull out because they own the whole property because then offering you to buy half of the share. Someone else can buy them out but legally they can't pull out.

      You can up your shares and most places won't allow you to own it all because they're only designed for people who can not afford a property without the help of shared ownership.

      I have not had any negatives. The only issue I have heard of is sometimes it takes a little longer to sell because both you and the housing association have to be happy with the price someone is offering for the property. As of yet I have not come across any other negatives.

  • I had no idea about this… it sounds like a really good option, especially for places with high prices like London, or where i live in Devon!

    • It just helps people get on the property ladder that otherwise don't earn enough/ can't afford the right amount of deposit x

  • This is such a good read, my partner and I are currently looking at buying our first house and nearly everything was a part ownership, which we were a little baffled and not to mention cautious of. This is such a good read! Thank you lovely x

  • A really good read and explanation, it seems a good way to get your feet on the property ladder if a full mortgage is not an option.

    • That's exactly why I did it. Being on my own I couldn't have afforded anywhere without this option x

  • A lot of people don't realise this is an option so it's great that you've posted something on it! Thanks for sharing!

    • Yeah a lot of people just think renting is the only option if they can't afford a deposit/ mortgage x

  • This is a really interesting post and good to hear from someone who has first hand experience. We are lucky that we were able to get a mortgage for our house but I know a lot of people can't and this would be the perfect option to own part of their home in a safe and affordable way

    Laura x

    • Well done on getting your first place it is super hard. Esp when you're a single girl like me whose fed up of renting haha x

  • Ah super useful piece of info, I think it's great that it is more normal to buy a house with someone else and not be married! x

    • Yeah exactly, which means us singletons that want to buy somewhere usually have no hope because you need a mortgage based on two peoples incomes x

  • In principal this is a great idea, I love the idea of not throwing money away on rent, great post! xx

    • Thanks, that's exactly why I chose to do it because I hated the thought that I could rent for 10 years and have absolutely nothing to show for it afterwards x

  • Thank you so much for this post. I'm saving for my own place at the moment and thought of mortgages are so scary! Brilliant information.

  • Great post. The only thing I worry about are the service charges as I've seen them rise and rise. Especially because you have no control over the rental side. But this is fast becoming the only housing option to people like me living in London. Earning too much for social housing but not enough for a full mortgage.

    • I haven't really found the service charge changing so far. The second year it went down and I got a refund and my third year I owed a little bit so quite stable (at the moment). x

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  • Well done on getting a mortgage, it's so hard for younger people now! x

  • Not something iv be happy doing tbh, I'll stick with renting from the council. Can already do anything I want to the flat and hardly any rent.

    • Everyone is different but I hate throwing money away with rent as it's no cheaper than the option i'm doing now x

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