How shared ownership schemes can help first time buyers
Whether you access the news in your car or in the comfort of your home, there is no escaping that there is a housing crisis and people are struggling to buy a home. With rising property prices requiring large deposits, people are often priced out of the area they want to live in with the only options either to rent privately or to continue to live with parents.
Despite being launched over four decades ago, shared ownership rarely features as a solution to the housing crisis.
Magna Housing plans to deliver over 30 new build shared ownership homes within Dorset and Somerset in 2020 These homes will help people get onto the property ladder who may not have thought they could afford it.
Helen Rafferty, Sales and Marketing Manager at Magna explains: “Shared ownership doesn’t involve living with random strangers in a house share. It simply means buying a percentage of the home and paying rent on the rest. Buying a percentage means a smaller deposit and smaller mortgage. It’s a quicker route to owning your own property and provides a different option for people to consider.”
Magna is working hard to promote the shared ownership scheme and has joined the National Housing Federation campaign to increase awareness. This is a three year campaign that housing associations across the country are being encouraged to take part in. More information on the campaign can be found online at: https://www.housing.org.uk/get-involved/promoting-our-sector/shared-ownership/join-the-campaign/
Here are some of the biggest misconceptions surrounding the scheme:
It is cheaper to rent: The monthly payments for a shared ownership property are less than renting privately, just with the added benefit of owning a share within your home.
You will never actually own your home: 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.
They are difficult to sell: This could be because there is a protection order (DPA) on the home. This is put in place to ensure that grant funded rural affordable housing remains affordable and in the ownership of local people. Whilst this sounds good in theory it can be challenging for those who are looking to purchase and sell a shared ownership home. Magna Housing takes a proactive approach and requests that the protection order is removed before the home is even built.
So how do you qualify?
Your household income needs to be under 80k
You cannot own another property
You will need to demonstrate that you have a good credit history and can afford regular payments and costs involved in buying a home.
You should have savings or be able to put down at least 5-10% deposit of the share of the property you are buying
Want to find out more?
Magna have launched their own shared ownership website featuring the shared ownership properties they have available: www.magnahousing.co.uk