Mortgage blog: Shared ownership – a sensible starting point

Shared ownership mortgages are becoming more and more popular, as first-time buyers take advantage of this scheme to facilitate their first step onto the housing ladder.

The scheme is available to first-time buyers who are deemed unable to purchase a suitable property in any other way - the way in which this is defined differs between shared ownership scheme providers, but usually client status and income are major factors. The scheme is available through housing associations on a large number of new-build homes schemes across the UK.

Most people have heard of shared ownership but don't really understand what it means. As a brief summary, it means that the purchaser, if they qualify for the scheme, is able to buy a proportion of the property and have a mortgage on it (usually between 25% and 75% of the property is initially purchased). The other proportion of the property is rented from the shared ownership provider at below market value, typically about 80% of the full rent, giving the purchaser the opportunity to save enough money to buy further shares in the property when they can afford to do so.

Lenders are able to provide mortgages on these properties at competitive rates, allowing those who would not have been able to buy because of circumstances, low income or lack of a deposit, to purchase a part of their new home. A helping hand is always welcome, especially in the current climate we find ourselves in.

Click here to find out more about how whathouse.co.uk can help you find the right mortgage.