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
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
Shared ownership homes are only available for first time
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
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
Shared ownership homes aren't big enough for a growing
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
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
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
No, it's probably just not understood. So here's the
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