The Shared Ownership Scheme is a government-initiated mortgage program in the UK, aiming to aid individuals in stepping onto the property ladder. It’s accessible to permanent UK residents who fall into the category of either first time buyers or previous homeowners struggling to acquire a new property.
Furthermore, your household income must not exceed £80,000, and the property you intend to purchase will predominantly be on a leasehold basis. Leasehold signifies that you’ll possess the property for a predetermined duration.
Through Shared Ownership in Manchester, you can secure your home through a combination of a mortgage and rental payments. The total of your rental payments will usually be lower than your mortgage payments.
When Shared Ownership was first introduced, the minimum share that you could own was 25%, whereas now, this has been brought down to 10% for some properties.
There is an option for homeowners to increase the percentage share that they own their home. This is called staircasing. This is usually done at the point of remortgage or when the homeowners have paid off the mortgage on the share that they own.
If you decide that you want to increase your shares, you can now purchase them in 1% instalments. This used to be in 5-10% increments.
Moreover, the charges increasing your extra shares have been lowered. Additionally, your landlord will cover the maintenance and repair expenses for the first decade of ownership.
The rules that apply to you and your Shared Ownership in Manchester may change depending on when you originally took out the mortgage. As a mortgage broker in Manchester, we recommend double-checking what you can and can’t do in relation to the new rules of Shared Ownership. Drop our mortgage advisors in Manchester a message if you are unsure about how your property is affected.
To access the Shared Ownership scheme in Manchester, you must first qualify for the scheme. The scheme is not for everyone, so it is worth checking that it is right for you before applying for it.
To check whether you are eligible for the Shared Ownership scheme in Manchester, you’ll first need to get in touch with your local Help to Buy agent in the area you are looking to purchase in.
You will need to give them information such as your income, budget, preference of where you would like to live in the area and your credit history. Once you have confirmed your eligibility, the next step is to begin preparing your mortgage application.
Using a mortgage broker in Manchester like us is your best bet from here. Not every mortgage lender will be able to offer their help with Shared Ownership mortgages, yet a mortgage broker has access to thousands of deals through various lenders.
There are pros and cons to Shared Ownership in Manchester, just like every Help to Buy scheme out there.
Saving for a mortgage deposit is often a worry among first time buyers, the Shared Ownership scheme usually only requires you to put down a deposit on the percentage of the property that you own. For example, if you are taking a mortgage out on 20% of a property valued at £200,000 (£40,000 mortgage) and you are required to put down a 10% deposit, you will only need to put down £4,000 deposit.
Numerous mortgage lenders, including those on our panel, provide Shared Ownership mortgage products. The scheme has become more popular over the last few years and first time buyers are opting for this scheme to help them get onto the property ladder. Moreover, Shared Ownership Mortgages can provide enduring stability as you become both an owner and occupant simultaneously.
You may get the chance to purchase your property in the future if that is something you are looking to achieve. If you want to eventually own the property, before taking out a Shared Ownership mortgage in Manchester, you should make sure that this is an option for you in the future because some building societies do not allow this. Whether you can purchase the property in the future or not will be in your contract.
You’ll enjoy secure tenure, unlike the uncertainty of the private market. As long as you can maintain your monthly mortgage payments, you can continue residing in your home for the duration of your lease, usually spanning from 99 to 125 years.
While there are many advantages to Shared Ownership, you also need to be aware of the cons. It’s important to note that you’ll be responsible for 100% of the ground rent and service charges for your property, regardless of the size of your purchased share.
As your home will be co-owned, you must seek approval from the relevant housing provider before making any structural alterations. This requirement might limit the sense of complete ownership freedom you’d typically have.
After a while of living within your Shared Ownership property in Manchester, you may decide that you want to move on and start looking at moving home. With most other mortgage types, this would be simple enough, however, with Shared Ownership, the process works slightly differently.
Whether you can sell your home depends on how much of the property you own. Usually, you are required to own 100% shares in the property before you are able to sell it.
Nevertheless, it’s important to recognise that the housing association usually retains ‘first refusal’ rights for the initial 21 years following your home purchase. Legally, this grants them the opportunity to present a purchase offer for the property before you consider selling it on the open market.
If you do not own 100% of the property, your first step is to try and purchase the remaining shares in the property and then look at selling it.
Shared Ownership is not for everyone by any means. Most of the time, as a mortgage broker in Manchester, we find that sole applicants and those struggling to save for a deposit most benefit from the scheme.
Taking out a Shared Ownership in Manchester requires you to meet a criteria. To see whether you qualify for the scheme, reach out to our mortgage advisors in Manchester and we can take a look at your circumstances.
To speak with the team, simply give our team a call or book a free mortgage appointment online. We would love to offer a helping hand to make your Shared Ownership process stress-free!
Date Last Edited 29/08/2023