If you’ve ever wanted to buy your own home, you’ll know how frustrating it can feel to be unable to invest where and when you want to. I remember it taking ages for us to find a home that we could afford so we were stuck renting for many more years than we’d planned.
Even if you’ve saved a good deposit and have a great credit rating, that doesn’t always mean you’re free to buy whatever home you like – often the interest rates on a mortgage will be too high and the monthly repayments may be beyond your budget.
Plus, house prices can mean that, even though you’ve got savings in the bank, it’s not enough to cover the large deposit required. You’re so close, yet so far away from your dream of owning a property.
I’ve seen first-hand how difficult it can be to get onto the property ladder as a first-time buyer if the area you want to (or need to) live in is expensive, with homes priced above the national average.
If that sounds familiar to you, I feel your pain. It can take years to get a larger deposit together so that you can actually afford to invest without having crippling mortgage repayments each month. And who can afford to save a deposit when you’re spending £££s on rent?
I’ve previously shared a blog post on how to continue saving a deposit for your home during the cost of living crisis so be sure to check that out to get you started – it might give you some ideas to cut costs and put aside more money for your future home.
But the good news is that there’s another possible way to enter the housing market – and that’s Shared Ownership. It offers a solution for those of us who are stuck renting but can’t afford to buy a house outright.
It’s a government-backed scheme for first-time buyers that allows you to buy a portion of the property – anywhere between 25% and 75%, depending on what you can afford, either as a cash deposit or with a mortgage.
You’ll own that amount and can then pay rent to cover the remaining share. The rent is usually paid to a housing association so it’ll be subsidised and lower than the private rental market. As such, it’s restricted to those with a household income of under £80,000 (or £90,000 in London).
As your financial situation improves or as you save more, you can increase to owning a larger share of the property – a process known as ‘staircasing’. This gives you more equity in the property (therefore more profit if you ever choose to sell) and it gets you a step closer to owning the property outright.
The best part is that you won’t have to compromise on the area you want to live in or the type of property you want to own. You won’t need to buy a fixer-upper with all kinds of maintenance problems or live in a less desirable area.
In fact, most Shared Ownership properties are new builds so they’ll have the latest fixtures and fittings and will conform to current standards of insulation and heating, which will save you money on your utility bills each month.
And you can live in more expensive areas that may be out of reach otherwise. So, if you’re considering living in east London, Berkshire, Guildford or Brighton (where I lived as a student and could never afford to buy!) you may actually find that your mortgage repayments plus the subsidised rent will still result in a smaller monthly payment than renting in the same area privately.
Shared Ownership is about jumping up the ladder when, otherwise, you might not even be able to make it onto the first rung, so it’s worth considering – if you can afford it. Consider changes in interest rates, your career and the cost of living, adding ‘worst-case scenario’ costings to your budget so see if you’ll be able to cover any fluctuations in your financial situation.
Let me know if you’re considering Shared Ownership in the comments below and please share your positive experiences with me if you’ve already invested in a property in this way.
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This article is a sponsored collaboration. The pink links in the content indicate a sponsored link or information source. The blog post reflects my own experience and the sponsor hasn’t had any control over my content 🙂
