With the January blues looming over many property hunters in London, Lauren Nicholson, Head of Marketing at Family Mosaic, provides a beginners’ guide to shared ownership and explains why it could be the best way to secure your dream home in the capital >>
Q. What is shared ownership?
A. Shared ownership is a government-backed scheme for people who are unable to afford to buy a home at full market value. It is a part buy/part rent scheme where you buy a share of the property and pay a subsidised rent on the share you don’t own.
For example, if the full market price of a home was £197,000, shared ownership allows you to buy a 30% share for £59,100.
It is designed as a stepping stone to completely owning your own home, allowing you to buy further shares in your property (which is called staircasing) when you can afford to.
Q. What are the benefits of buying through shared ownership?
A. Shared ownership has many benefits, particularly for first time buyers in London. These include:
- Affordability. Because you are buying a share of the property, your mortgage deposit will be much smaller than buying outright. A minimum mortgage deposit is usually 10%, so if you buy a 30% share for £60,000, you would only need a £6,000 deposit.
- Because rents are subsidised, your combined monthly mortgage and rent payment can work out cheaper than the mortgage payment when buying outright, and often it is not much more than renting on the open market.
- You will own part of the value of your home, rather than paying rent with no return.
Q. Why buy with Family Mosaic?
A. Family Mosaic is a leading housing association in the UK, with over 50 years of experience. We have an exceptional track record in delivering high quality, large scale developments across London and the south east and are passionate about helping people on to the property ladder.
After carrying out extensive customer research in April 2013, we have undergone a brand refresh to help our customers better understand shared ownership and guide them through the process. Take a look at our new website to see our newly designed infographic, where we have broken down the shared ownership process into 10 easy steps. We’ve also created a customer log-in area on our website which has some really useful tools, such as saving your property searches and checking where you are in the buying process in our ‘sales status tool’, so you can easily see what needs to be done next and prepare accordingly.
Q. Who can apply for shared ownership?
A. Eligibility will vary depending on the development you are looking at, the property size you need and other criteria imposed by the local authority. These criteria aside, if you earn under £66,000 (if buying a one or two bedroom home) or £80,000 (if buying a three or more bedroom home) and are an ftb, then shared ownership can work for you as the most affordable way to secure your dream home in London.
Q. Does it matter what job I do?
A. No. While it may favour those who work for the Ministry of Defence, shared ownership is open to all professions.
Q. Is it easy to get a mortgage for a shared ownership property?
A. With shared ownership becoming increasingly common, more mortgage lenders are lending on shared ownership properties. If you buy with Family Mosaic, we can help you find a mortgage advisor who not only specialises in shared ownership properties, but who will also be able to guide you through the application process.
Q. What kinds of properties does Family Mosaic offer through shared ownership?
A. Family Mosaic works with many national house builders and local contractors, building high quality apartments, maisonettes and houses in popular areas across London. We pride ourselves on offering high specification, and our properties come with integrated white goods included.
We have exciting developments launching this year in Highbury and Islington, Hackney, Lewisham, and Rotherhithe to name a few. Visit our website, familymosaicsales.co.uk, for details or call our sales team on 020 7089 1315.
Q. What happens if I want to sell?
A. You can sell your home at any time and, like staircasing, the selling price of your home will be based on the market value at the time.
We have a huge database of people looking for shared ownership homes and will market the property for you during the first eight weeks. If we’ve not been able to find a buyer in that time, you can then decide to advertise with an estate agent. Remember, however, that if you are just selling a percentage of the property through shared ownership, the buyer must meet the affordable homes requirements. If you own 100% of your property, you can advertise on the open market via an estate agent.