According to the Mortgage Advice Bureau, home ownership has declined to 64% of households. In an August 2016 article on its own website, the Bureau predicts that the number of shared ownership properties could rise because shared ownership is a financially easier way for people to enter the property market.
In 2003, home ownership was 73%. This has now declined to 64%. Many people find that they cannot afford to buy their first home, especially in large cities such as London, Sheffield and Manchester where property prices are high.
Shared ownership can address the affordability issue. It means that people can own a proportion of their home, between 25% and 75%, then pay rent for the remainder. A mortgage can be arranged to buy the ownership portion of the deal, but the deposit required can be as low as 5% of the property’s value. A mortgage broker can arrange both a mortgage, and mortgage protection insurance.
At any time, the ownership portion can be increased. The amount required is based on the current valuation of the property, not the value when the household first moved in.
Most shared ownership schemes are operated by housing associations and are for first-time buyers or people who used to own their own home, but cannot afford to currently buy one. The scheme is only available for households with an annual income of £80,000 or below, or £90,000 or below in London.
Shared ownership schemes are part of the government’s strategy for helping people buy a home.