5 common myths about Shared Ownership
Shared ownership isn’t new, but with so many myths out there, it’s certainly considered a grey area amongst many aspiring homeowners. We’re keen to right the wrongs and provide more clarity on the scheme, so we’re shining a light on 5 common misconceptions.
Myth 1: “If your property requires mandatory construction works, you are 100% liable for maintenance despite partly owning [your home].”
Answer: Under the new Shared Ownership model (effective in 2021), the building works of new build homes are protected by The Housing provider for the first 10 years of ownership. There is also a developer New Build Warranty in place for 10 years and you will have the benefit of the developer defect period.
Prior to the new Shared Ownership model (2021), the responsibility for repairs & maintenance was solely on the Leaseholder.
Myth 2: “It’s incredibly difficult to buy the rest of the house. This must be done in 10% increments.”
Answer: You can staircase in 1% increments (subject to Lease terms) or all the way up to 100% in one go.
Myth 3: “Service charges are uncapped”
Answer: Most of our homes have uncapped service fees but we’re aware of the economic climate and that affordability is a key reason behind why many of our customers choose to buy using a shared ownership scheme. We are committed to working with our housing partners to keep our service charges realistic and affordable, and this is reviewed yearly.
Myth 4: “If you want to buy more shares of your home, you have to pay both parties’ legal fees.”
Answer: Both parties are responsible for their own legal fees since it became possible to purchase additional smaller shares of your property, such as 1%. This is a change which came into effect in 2021 when new Lease terms were announced as part of the Affordable Homes Programme (AHP).
Myth 5: “It’s better to keep saving for the deposit of a traditional mortgage than buy using a shared ownership scheme, even if it takes you 5+ years.”
Answer: Saving up for a 5% or 10% deposit on a traditional mortgage will always require considerably more funds than those required to buy a percentage of a home through a shared ownership scheme. The shared ownership scheme will allow you to step onto the property ladder quicker and you’ll be able to buy more shares as and when you can afford them. If you choose to take this approach in the current economic climate, you’ll be investing your money in property when inflation is high – and there’s no denying that’s far more attractive than paying your private landlord’s ever increasing rent fees!
The current economic climate means that Shared Ownership homes are in demand! With more home buyers struggling to buy a home via a traditional mortgage scheme, the demand for buying a more affordable home using the Shared Ownership scheme is on the rise.
No matter how turbulent the economic climate, combining the monthly cost of a 40% Shared Ownership mortgage and rent will continue to cost less than traditional monthly mortgage costs.
Have you heard any other rumours about shared ownership? We’d love to hear them and let you know if they’re true, false and where you stand with them! Get in touch with us on social media @wearestarthur