The Benefits of Shared Property Ownership

Renting a House vs. Buying a house vs. Homebuy Schemes

Feb 12, 2009

Homebuy schemes are often favoured to renting a house. Shared property ownership allows a buyer to build home equity, perform home improvements and have greater freedom.

Shared property ownership or homebuy schemes are an affordable way to get a foot on the property ladder. They allow someone to buy either a 25%, 50% or 75% share of a house. The percentage of a property owned can be changed. Homebuy schemes involve paying a mortgage on the part owned and rent on the remainder.

Shared Property Ownership Schemes & Affordable Housing

Homebuy schemes are normally run by Housing Associations. Access to shared property ownership schemes is based on affordability, with preference given to those on priority housing lists. Homebuy schemes allow someone that can't afford to buy a house outright to own a share of one instead.

Many mortgage lenders won't allow someone to borrow a sufficient amount to buy a house outright. In the current financial climate few lenders will go beyond 3.5 times annual income. Whilst Nationwide reported that property prices have come down by 16.6% since their peak, prices are still prohibitive for first-time buyers.

Lower House Deposits for Shared Property Ownership Schemes

The house deposit required with shared property ownership schemes is also reduced. As two-thirds of current mortgage deals for those wishing to buy a house outright require a house deposit of 25%, a homebuy scheme can prove extremely helpful in terms of getting on the property ladder.

Homebuy Schemes Permit Family Pets, Home Improvements & Greater Personal Freedom

Once someone has chosen to buy a house under a homebuy scheme they are allowed to perform home improvements. When renting a house, it doesn't make financial sense to do work on a house. A further main advantage is that shared property ownership allows partial owners to keep family pets.

Homebuy Schemes and Home Repairs

The terms of the lease will outline the responsibilities of each party in terms of maintaining the property. Most leases will state that the cost of home repairs will be paid for on the basis of ownership share. Whilst home repairs will never be as cheap as they are for those renting a house, they are cheaper than outright home ownership.

Shared property ownership or homebuy schemes provide someone on a lower income with a chance to buy a house. Those wishing to take advantage of homebuy schemes will have to check with Housing Associations to see if they are eligible.

The copyright of the article The Benefits of Shared Property Ownership in Buying/Selling a Home is owned by Asa Ghaffar. Permission to republish The Benefits of Shared Property Ownership in print or online must be granted by the author in writing.