Shared ownership could be the right move for many FTBs
September 27, 2007
As a result of rising interest rates and soaring house prices many first time buyers in the UK have been struggling when it comes to getting onto the property ladder.
Even those that have managed to qualify for the huge mortgage required to purchase a property at today’s prices have found that the repayments have been extremely high, making it difficult for them to commit to such a large loan and therefore hindering them from getting onto the property ladder.
However, according to some officials many of these first time buyers, particularly those that are on lower incomes or are on their own with just one income, could benefit from shared ownership, where the buyer purchases a percentage of the property and pays rent on the remainder until such a time when he or she can afford to gradually purchase the remaining share. These shared ownership scheme are run in conjunction with housing associations in the UK, and are proving an effective solution for those looking to get onto the property ladder but without the means to do so on the open market.
When purchasing a shared ownership, buyers are able to buy a set share, such as 25%, 50%, or 75%, and then pay rent on the remaining share. The idea of the shared ownership property is to enable lower income first time buyers to get their foot onto the property ladder without having to find a lender that will offer them a huge loan – which for some first time buyers simply isn’t possible. Buyers can then staircase, which means that they can purchase further shares in the property gradually as and when they can afford to, until they have purchased the full 100% of the home.
Alan Wright
27th September 2007
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