Is shared ownership worth it? It gets you on the ladder for less, but there are real trade-offs. This is an honest look at the pros and cons so you can decide with your eyes open, not a sales pitch.
Shared ownership pros and cons
The big draw is a much smaller deposit and mortgage, which makes buying possible far sooner. The main catch is that you pay rent as well as a mortgage, and there are extra rules that come with a leasehold home. Whether it is worth it depends on your budget, the alternative and how long you plan to stay.
The advantages of shared ownership
You need a smaller deposit because it is based on your share, not the full price. Your monthly cost can be lower than renting the same home, you have security as a leaseholder, and you can buy more shares over time through staircasing. For many first-time buyers it is the only realistic way onto the ladder.
The disadvantages of shared ownership
You pay rent as well as a mortgage
On top of the mortgage on your share you pay rent on the rest, plus a service charge. See the full picture in shared ownership costs.
Selling can take longer
The housing association often has a set period to find a buyer first, so a sale can take longer than an open-market home. We cover this in selling a shared ownership home.
Service charges and leasehold obligations
As a leaseholder you pay a service charge and must follow the terms of the lease. Charges can rise, so read the lease carefully before you buy.
Common shared ownership worries
Search online and you will find the word “nightmare” attached to shared ownership. Most concerns come down to service charges, selling and the rules, all of which are manageable if you go in informed.
Can I be kicked out of a shared ownership house?
As long as you keep up your mortgage and rent and follow the lease, your home is secure. For the detail see can I be kicked out of a shared ownership house.
What is the downside to shared ownership?
The honest downsides are the rent, the service charge and the extra steps when you sell. Read more in what is the downside to shared ownership.
Is shared ownership a good idea for you?
If it gets you a home you would otherwise wait years for, and the monthly cost is comfortable, it can be a good idea. If you could buy outright soon, or you may move on quickly, it may not be. The right answer is personal, which is where advice helps.
Getting honest advice in Lincolnshire
As former bank managers based in Sleaford, we give buyers across Lincolnshire a straight view of whether shared ownership stacks up for them. Start with how shared ownership works, or talk to us about shared ownership mortgage advice. Your home may be repossessed if you do not keep up repayments on your mortgage.
