Debunking myths on shared ownership

Alan Bradley, head of sales for Bromford Homes, shares his thoughts on 'Generation rent' and busts some myths on shared ownership - the obvious solution?

As the number of renters under 40 looks set to rise, perhaps now is the time for shared ownership to take its bow.

Shared ownership or 'part buy/part rent' is not new but it is often misunderstood and sometimes viewed negatively or with suspicion. It's described by other names including Help to Buy shared ownership - no wonder people are confused.

With so many misconceptions, it might be helpful to bust some commonly-held myths:

Shared ownership is a bit of a last option

Absolutely not. In fact, it's an ideal solution if you want to get on the property ladder but don't have the large deposit needed - average first time buyers today need a £30,000 deposit which is almost ten times the deposit required in the early 1980's in real terms. Good news with house prices increasing at a faster rate than average salaries.

Shared ownership homes are only available for first time buyers

Yes but we can make exceptions for instance for those going through relationship breakdowns or people who have had to sell homes for other pressing reasons.

Shared ownership homes are 'sub standard'

These homes are built to the same quality and in the same areas as properties for 'outright sale'. We have shared ownership homes on offer in desirable areas such as the Cotswolds and Oxfordshire - places where many locals are priced out of the market and are forced to move out of the area they grew up in.

By part renting, you can't say you're a property owner and don't have real stability

With shared ownership you have the option to buy between 25 and 75 per cent of the property so you are the homeowner. Unlike renting, you can decorate as you want to and you can feel secure that you won't have to move when the landlord wants to sell.

These properties are leasehold which isn't as good as freehold

Shared ownership homes usually have a brand new 125-year lease providing a home people can own a stake in from day one and the opportunity to increase that stake as their affordability increases. If the buyer goes on to buy all the shares in the property usually the freehold is transferred to them.

The monthly costs are high

Shared ownership is often cheaper than renting.

Shared ownership homes are hard to find

We - and many others - offer shared ownership homes in any new development so they will be available in the same way as any other property.

Shared ownership homes aren't big enough for a growing family

Most of our shared ownership homes are two and three-bedroom but the beauty of them is that they can help you get on the property ladder when you otherwise wouldn't be able to afford to and enable you to move to somewhere bigger if your life changes and you want that.

You can't make money on a shared ownership home so it's not a good investment

Wrong! These homes increase in value just the same as other properties do which means that as and when you want to move, you should have some equity towards your next place - or if you want to stay where you are and increase your share as you can afford to - what we call 'stair casing'- you can end up owning the entire house outright.

But they're hard to sell

Wrong again. These homes are marketed exactly the same as any other and, in fact, can be a more attractive option to other buyers as they will be more affordable.

The process of getting a shared ownership house is complicated

No, it's probably just not understood. So here's the lowdown:

There is a qualification process which involves making an application to the local 'Help to Buy' agent in the area you want to buy but this can be done online and you will be informed very quickly  if your application has been successful.

Not all high street lenders will advance mortgages on shared ownership properties but the major ones do and we have access to independent financial advisers who can give advice as to the best lender for you.

Some developments, particularly those in rural areas, will have restrictions on who can buy. This is usually so that local people can access affordable properties in their own area but a quick phone call to the housing association who is selling the properties will give you all the information you need.

So, there you have it. Myths debunked. What are you waiting for? Perhaps now is the new dawn for shared ownership - it really is the obvious solution for many.

31 July 2015