10 myths about Shared Ownership
10 myths about Shared Ownership
Shared ownership is an excellent way to buy a house, not least because it makes the purchase more affordable. Many people don’t understand all the benefits, however. In addition, there are many misconceptions about what buying through shared ownership really means. Below we debunk 10 of the most popular myths about shared ownership.
Myth 1: Shared ownership means buying the house and sharing it with someone else?
This isn’t how it works. You share ownership of the property with a housing association, not another person. This means you and your family are the only people that will live in the home. Financially, you get a mortgage to cover the percentage of the house you buy and you then rent the remaining percentage from the housing association.
Myth 2: The process of getting a shared ownership mortgage is harder than a traditional mortgage.
It is no harder getting a shared ownership mortgage than it is getting a mortgage if you are buying a house outright.
Myth 3: Shared ownership homes are lower quality than homes you buy outright.
Absolutely not. Homes you can buy through shared ownership schemes are just as high quality as any other type of home.
Myth 4: You never own the home outright and will have to pay rent forever.
This one is your choice. You can continue owning a percentage of the home and pay rent on the remainder for as long as you live there. You can also, however, staircase your ownership percentage. This means you can purchase additional shares in the house right up to 100 percent. In other words, you can own the house outright at some point in the future if you choose to.
Myth 5: It is cheaper to rent a home.
Sometimes it is cheaper, but not always. It depends on a range of factors including the area you buy/rent in, the percentage of the property you buy, and the mortgage deal you get. Plus, with shared ownership, there is always the potential that the value of the property will rise over time which can make it considerably cheaper than renting over the long term.
Myth 6: Shared ownership homes are only available in less desirable areas.
In fact, shared ownership homes are available in the same locations as properties you can buy outright.
Myth 7: As you rent part of the property, it's just like having a landlord so you'll never have stability.
This one isn’t true either as you will have the same stability buying a house on shared ownership as you do buying outright. The housing association you get the scheme through is not like a traditional landlord.
Myth 8: You can't sell the property if you want or need to.
You can sell the property whenever you want. There will be some rules, such as giving the housing association first refusal on buying your share of the property. You can sell the share you own whenever you want, however.
Myth 9: It is hard to qualify for shared ownership.
There are criteria but so long as you meet the criteria, you will qualify. You will have to qualify for a mortgage, however, just as you do when buying outright.
Myth 10: Shared ownership homes are hard to sell.
There is no difference in selling a shared ownership home compared to a home you own outright.
Shared ownership really is an attractive option, particularly after busting these common myths.