Why buy with Shared Ownership?

December 2018

TMP The Mortgage People have the most recent update on Shared Ownership and why now is the best time to buy using the scheme. 

Last week was a good week for Shared Ownership – in the Budget we saw a real focus on Shared Ownership which was extremely welcome after it seemed to get forgotten in 2017’s Budget. First Time Buyers purchasing a Shared Ownership property worth up to £500,000 will now get the same Stamp Duty relief as First Time Buyers buying on the open market, saving them up to £5,000. Even better news is that this change will be retrospective to last year’s budget, so people who bought a Shared Ownership property in the last 12 months may be able to claim a refund of Stamp Duty!

This change further demonstrates the government’s ongoing support for Shared Ownership and the increasing recognition that it’s a way of achieving home ownership where otherwise the only options would be renting or living with family.

The Bank of England also announced that their base rate would remain at 0.75% for at least another month. Although we saw an increase in August, the base rate is still amazingly low, in fact, in over 314 years from October 1694 to March 2009 the Bank of England’s interest rate never dropped as low as it is now!

A low Bank of England base rate means lenders charge less to borrow money from them, so if you can secure a low 5 year fixed interest rate mortgage now, the saving could be substantial if interest rates increase further in the next few years.

Shared Ownership isn’t limited to big cities, people are using the scheme to get onto the housing ladder all over the UK where otherwise home ownership would be out of reach. It’s not just for First Time Buyers either, more and more people are using Shared Ownership to move out of their current situation but remain in the enviable position of being a homeowner. Whether due to a marital split, job relocation or a growing family, whatever the reason, good or bad, Shared Ownership is offering more people the security that home ownership gives them.

The average Shared Ownership buyer is 36 years old, perhaps not the First Time Buyer you imagined. Shared Owners are made up of a varied cross section of people buying differing shares, its not all about buying the smallest share possible, a lot of people buy much bigger shares when they’re not quite able to afford 100% home ownership. In fact, we’re seeing more people using Shared Ownership as a stepping stone, starting their home ownership journey in a Shared Ownership property and progressing to buying on the open market a few years later, giving them an opportunity they perhaps wouldn’t have had without using Shared Ownership to get them onto the housing ladder in the first place.

Staircasing is also something people seem to be really embracing these days, moving into their Shared Ownership home with the share they can afford then buying more shares of their property when they’re able to. That’s the beauty of Shared Ownership, its adaptable to peoples’ situations.

With interest rates low and Stamp Duty relief extended to include Shared Ownership, now really is the time to explore whether home ownership is for you.

You can find properties available with Shared Ownership right here on our website!

- Kelly McCabe, Managing Director at TMP The Mortgage People