Shared Ownership - a real solution in today's market
First time buyers are finding it increasingly difficult to enter the world of home ownership as the credit crunch continues to bite. News stories about economic uncertainty and falling house prices do little to encourage the aspiring home owner to take that brave first step onto the property ladder.
But shared ownership schemes are attracting a great deal of interest and could be the ideal solution for many people who are finding that purchasing a home outright is no longer a reality. In London alone there are plans to deliver 50,000 new affordable homes over the next three years*, and shared ownership is likely to be playing a significant part in this pledge.
How does it work?
Shared ownership is the term used to describe a scheme that allows a buyer to purchase part (usually between 25% and 75%) of a property in conjunction with a co-owner, usually a housing association. Rent is paid on the remaining share of the property, but this is subsidised to ensure that the overall monthly payments are affordable. In order to cover costs, such as legal fees and stamp duty, the buyer does still need to raise some money at the outset.
Over time, the buyer has the option to purchase a larger share of the property and, in most cases, can eventually own the property completely.
The Key Worker Living Programme
The government introduced the Key Worker Living Programme to make home ownership affordable for key workers (teachers, nurses, police officers, etc) and others in need of housing. The programme is limited to certain areas including London, the South, South-East and East of England.
With the NewBuild HomeBuy scheme, all of the properties available are newly built or refurbished.
The recently launched MyChoice Homebuy provides a low-interest equity loan towards the cost of purchasing a home on the open market. The amount of the loan depends on individual circumstances, but is set at between 15% and 50% of the property value and is redeemed in full when the property is sold.
Teachers Building Society welcomes applications from teachers and education professionals on the NewBuild Homebuy and MyChoice Homebuy schemes. In fact, we remain one of only a few lenders who will provide mortgages for shared ownership schemes.
For more information, call our mortgage consultancy team on 0800 378 669 or click - Shared Ownership Mortgages.
* Source: Evening Standard, www.eveningstandard.co.uk
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