This National Home Buying Week, Kevin Sims, Director of SO Resi looks at whether shared ownership could be the key to unlocking your first home?
The start of this year has seen first time buyers take over the homebuying market by storm, making up 63% of all home moves in January.1 However, too many first time buyers across the country are all too often finding themselves priced out of homeownership. The challenges posed by high house prices, stringent mortgage borrowing conditions, and building a 10% or even 5% deposit can delay aspiring homeowners’ plans
As a result of this, more first time buyers are turning to shared ownership as an accessible route to homeownership, and today around a quarter of a million households are on the property ladder thanks to the scheme.2
Shared ownership enables homebuyers to purchase a percentage share of a new build home or apartment, usually between 10%-75% and often with a mortgage, while paying below market rent on the remainder. The buying process is straightforward, and buyers are supported throughout by the seller (usually a housing association or private shared ownership provider). Most of the major banks regularly deal with shared ownership, and often have dedicated teams and specialised mortgage products available – there are currently around 30 dedicated shared ownership lenders in the market.
Homebuyers with shared ownership can put down a deposit as low as 5% to purchase a property. Their deposit size is based on the percentage share that they are buying, rather than the full value of the property.
For example, taking a property worth £300,000 with an example share of 25% (worth £75,000). A buyer will be able to put down a deposit as low as £3,750, which equates to just 5% of £75,000.
If the buyer were to purchase the property at full market value, their deposit could be significantly higher, at £30,000 (based on example 10% deposit).
Shared owners can also increase their ownership of their home over time, and eventually own 100% of the property. This process is called staircasing, in which homeowners purchase more shares in their property – either incrementally or all the way to 100%. We also offer SO Resi Plus, a scheme which makes it possible to purchase an additional 1% share each year with no additional fees.
Rochelle Smith, who recently bought a two bedroom apartment at SO Resi Oxshott, says, “I already know this home is a long-term investment for me. I will absolutely be staircasing each year, which is very achievable to me, and crucially cuts down the amount that I will pay in rent without increasing my mortgage. My plan is to achieve at least 40% equity over the next few years.”
If you’re starting your homeownership journey during National Home Buying Week, why not visit our newest developments, and meet with our sales teams to find out if shared ownership is right for you?
Find out more about our newest schemes below:
SO Resi Canning Town
A selection of one, two and three bedroom apartments in one of London’s most vibrant locations. On the doorstep are ExCeL London, the River Thames and Trinity Buoy Wharf, while the development itself includes a private podium garden, wellness studio, and 24-hour concierge service.
SO Resi Hendon Waterside
Opening up on to the Welsh Harp Reservoir, a peaceful idyll in North West London, SO Resi Hendon Waterside comprises sleek, modern one and two bedroom apartments in a regeneration hotspot. Hendon railway station and Hendon Central tube station are both just a short walk away.
SO Resi Wembley
SO Resi is creating new shared ownership homes at SO Resi Wembley Park and SO Resi Wembley Way in one of London’s hottest locations for first time buyers, having been transformed into a shopping, cultural and entertainment destination nearby the OVO Arena and Boxpark.
To find out more about shared ownership, visit us online https://soresi.co.uk/
Building Relations
Building Relations is a PR & communications company that has offices in London, Egham (Surrey) and Edinburgh specialising in property, construction and the built environment. Clients include large and small developers, housebuilders, housing associations & providers, estate, land and buying agents, construction firms and many other types of property-related companies.
