One of the obligations imposed on builders by local authorities is the obligation to build affordable housing within major developments. Roughly 1/3 of all social housing in Staffordshire is offered for sale on a Shared Ownership basis.
Shared ownership is sometimes the only way young people can get a foothold on the housing ladder and are generally only available to first time buyers who can do the following:
- Show they are otherwise unable to afford to buy a suitable home on the open market
- Have a good credit rating
- Show they have savings to meet the costs of a home purchase, which is normally around £4000. The majority of this will be needed to pay stamp duty.
Most good builders will point you in the direction of an experienced financial advisor who can help you with the application.
The benefits of Shared ownership include:
- Buyers have more affordable monthly costs
- Deposits required are much lower than in a conventional house purchase
- Buyers leave the rental sector where large deposits are hard to save and where rent can be seen as money down the drain, (although you will pay rent on the part of the property that you don’t own)
- You will own an interest in a beautiful new house built to the latest environmental standards
- In the future once you are financially able to you can buy more shares of your property until you own it 100%, this is known as stair casing
- Once you own the whole house you will pay no more rent
- All this can have a beneficial effect on your credit rating
- It will be free to put your own stamp on your own home
Your interest in the property will be what is known as leasehold. The transaction is complex and requires a specialist solicitor.
That’s why it’s important to do the following:
- Save time and prevent losing the house to another prospective buyer
- Exchange contracts within your reservation period (normally 28 days)
- Choose a firm who can easily handle any stair casing for you in the future