With so much uncertainty around the future of the UK property market, and how the financial landscape could be altered if the outcome of Brexit is a no-deal, it would be understandable to see property developers and housing associations pulling back. However, it’s understood that the property market isn’t quite as quick to react to any huge changes, therefore it’s been advised that a market crash is extremely unlikely.
With that in mind, it’s actually a pretty good time for first-time buyers to be taking that all important leap onto the property ladder, with mortgage rates at a relatively low level, and so many supportive schemes on offer around the country. Shared ownership schemes are just one of the housing association backed schemes which are becoming more and more readily available and are proving particularly popular.
So, what is shared ownership?
The way in which shared ownership schemes work is simple, the scheme is set up by a housing association, to offer prospective buyers the chance to buy a share of a particular property. The housing association at this point owns the rest of the property, but house owners are given the opportunity to increase their ownership all the way up to the full 100 percent. The home owners therefore pay their mortgage on the 25% they own and pay rent to the housing association on the associating 75% that they own.
In theory, this means that you could purchase a house with as little as 5% of 25% value of the entire property (depending on the mortgage provider), meaning the years of saving could be over much sooner than you think.
Why are more housing associations offering the scheme?
Whilst one of the reasons that housing associations are creating these schemes is that they understand the difficulty first-time buyers face in the current economic client, and they want to do something to help with this, there of course is financial gain to be had as a secondary benefit. The way housing associations see it is, the buyer saves money because their deposit is at a much lower rate than a traditional mortgage, and in return the housing association earn money through the rented section of the home, a win win you might say.
For more information on shared ownership schemes within your area, head to: www.buyanasterhome.co.uk and get in touch.