Shared Ownership Myth Buster #2

March 2016

The scheme is designed to give you a starting point for getting on the property ladder.

We’ve put this myth buster together to try and debunk some of the misconceptions that you might associate with Shared Ownership.

If you would like to discuss Shared Ownership with us, just get in contact with our Low Cost Home Ownership Officer, Anita Forth. She will help you as best she can.

#1 I won’t be able to get a mortgage

Granted, previously there have not been a lot of options to get a Shared Ownership mortgage, but more recent times have shown a surge in products becoming available to you.

Currently, there are 157 products on the market for Shared Ownership. They range from 5% - 20% deposits from a range of lenders and have interest rates that rival a standard mortgage. So don’t be made to believe that there aren’t any options for you!

Check out Jon Lord’s guest blog from Metro Finance where he explains that there is actually a thriving market for Shared Ownership mortgages.

#2 Shared Ownership is a bit of a last option and I won’t have real stability

This is definitely not the case. It’s an ideal solution if you want to get on the property ladder but don’t have the large amount of money that is needed. On average, to buy a house without a scheme like this one or Help to Buy, buyers need around £30,000, which isn’t attainable in this day and age with basic monthly savings alone.

Shared Ownership is a very good scheme for getting you in the position of a homeowner without the full cost of being a homeowner.

Unlike renting, you can feel secure in your new home that you won’t have to move when the landlord wants to sell. You make decisions like that and if you want to stay for the rest of your life, then you can stay!

#3 The monthly costs will be too high if I’m paying a mortgage AND rent

This is a common misconception due to people’s perceptions of how much mortgage and rent payments are. They are not full price payments as the scheme is designed to help you manage the payments in amounts you can afford. That’s why at application stage we assess whether you can afford future payments as well as making sure you are taking on something you can manage long term.

#4 Shared Ownership homes aren’t big enough for a growing family

Most of the Shared Ownership sales that we see are two and three-bedroom, so they are definitely big enough for a growing family. The beauty of this scheme is that it gets you on the property ladder when you wouldn’t be able to afford to whilst enabling yourself to move in to somewhere bigger if your situation changes.

#5 The application process is too difficult

The Shared Ownership application process involves vital steps that we need to take in order to ensure that you are taking on something that you can afford in the future, and not just now.

It probably sounds difficult because it isn’t widely understood as other schemes are.

In order to apply for Shared Ownership, you have to fill in the application form on our website first so we can see if you meet the criteria for the scheme. This can be done online and you will be informed straight away (providing you applied online) about whether or not you have been successful.

It is best to speak to a financial advisor so they can find the appropriate mortgage for you as they can give advice as to which bank is the best lender for you.

Some developments my have restrictions on who can buy, but this is usually in place so that local people can access affordable properties in their own area, but this will be highlighted in the property description. If you are unsure then you can give a quick call to the housing association that is selling the properties and they will tell you everything you need to know.

It is vital that you apply for the scheme before you find your dream home!

Check out part one of our series here.