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If you are looking to purchase your first home, you may initially be put off by the cost of a mortgage to buy a home outright. It can take years to save enough money for a deposit, and full mortgage repayments can be substantial. The Shared Ownership scheme offers an alternative to these options, allowing you to purchase shares in a home without buying the property outright. So, can you ever own 100% of a Shared Ownership property?
Yes, you can reach full ownership of a Shared Ownership property through the process known as ‘Staircasing’. By purchasing an initial share – usually between 25% to 75% – you can then gradually increase your ownership by purchasing additional shares, eventually reaching 100% ownership.
Keep reading to find out more about the process of staircasing and what reaching full ownership of your property means for your monthly budget.
When you first purchase shares in a Shared Ownership property, it is likely that your initial ownership will be between 25% and 75% of the property. This means that you will only pay a deposit to cover the portion of the home you own. For the remaining portion of the property you will pay monthly rent, the cost of which depends on the size of the shares you own.
However, with time, you can gradually increase your ownership of your property through a process known as ‘Staircasing’. Staircasing is the process of purchasing additional shares in your home, which consequently reduces the amount of rent you pay. Through this process, in most cases, you can eventually reach 100% ownership of your home.
When you reach 100% ownership of your Shared Ownership property, it is important to know whether you are on a leasehold or a freehold. Shared Ownership properties are generally leasehold, which means that even once you own the home outright, you may still be subject to service charges and ground rent. It may be possible to convert your home to freehold upon reaching full ownership. Contact your housing association to find out for certain.
By saving enough money to carry out staircasing, you are able to increase your ownership of your property all the way up to 100%. At this point, you will have reached full ownership of your home and you will no longer need to pay rent.
It is worth noting that some housing associations will only allow staircasing for Shared Ownership properties capped below 100%. Make sure to check with your association before you begin staircasing to ensure you can reach 100% ownership of your property, which will allow you to own your home outright.
View some of our previous customer stories to find out more about real-world examples of the Shared Ownership journey: Customer stories
There are a number of benefits to purchasing a home through the Shared Ownership scheme and gradually increasing the shares you own. These benefits include:
The Shared Ownership scheme is designed to help first-time buyers to get on the property ladder. To be eligible for the scheme, you must either be a first-time buyer, or be in the process of selling your home. If you are living outside of London, your household must also have a combined income below £80,000. For those living in London, the limit for combined household income rises to £90,000.
To check your eligibility for purchasing a Shared Ownership property, use our quick and simple eligibility checker.
Despite the obvious advantages to purchasing a Shared Ownership home with a smaller initial deposit, there are some financial considerations to factor in when planning your monthly budget. For example, you are still required to pay rent on the share of the property that you do not own, and you will have full responsibility for any maintenance requirements.
Another cost to remember is that you will require a valuation every time you wish to purchase additional shares in your home. This is an extra cost to factor in when you come to increasing your ownership of your Shared Ownership home. Receiving a valuation is an important step as it ensures that both parties involved are paying and receiving a fair price for the home, based on the current market conditions. After receiving a valuation, it will typically remain valid for three months, after which you will require a new one.
Find out more about the cost of purchasing a Shared Ownership home by reading our detailed blog: Is Shared Ownership Cheaper Than Buying A Home Outright?
At Plumlife homes, we are dedicated to providing quality properties at affordable prices, with Shared Ownership and Rent-to-Buy schemes for first-time buyers.
To find out more about how the Shared Ownership process works, contact a member of our team. View our range of available Shared Ownership properties here, and check your eligibility and affordability using the links below.
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