April Mathieson, a 33-year-old teacher and mother, decided to pursue homeownership near her friends and family. However, faced with affordability challenges in her desired location, she opted for shared ownership. Following her sister’s example, April purchased a 50% share of a property in Preston, Lancashire.
Shared ownership involves buying a portion of a property and paying rent on the remainder, typically between 25% and 75%. April initially bought a 50% share in 2020, later selling it to staircase up to full ownership of a three-bedroom semi-detached home.
April strategically planned to staircase due to expected salary increases. With each staircasing step, the cost is determined by the property’s market value at the time, influenced by property value fluctuations. Her salary growth facilitated an additional £7,000 deposit within 18 months to reach 100% ownership.
Shared ownership, as revealed by a West Brom Building Society survey, aids 79% of users in entering the property market, with 54% enjoying lower monthly costs than renting. Despite its benefits, shared ownership entails annual rent payments to the housing association for the unowned share, alongside service charge fees and full responsibility for property maintenance.
Kelly McCabe, Managing Director at The Mortgage People, noted a rising trend of shared ownership adoption post major life changes. Shared ownership’s accessibility empowers diverse individuals, providing housing stability amid affordability challenges.
For April, shared ownership facilitated a return to her childhood village, fostering proximity to loved ones and work. Without this scheme, residing in her desired area would have been unattainable due to high costs. The straightforward staircasing process with West Brom further enhanced her experience.
To qualify for shared ownership, a household income cap of £80,000 (or £90,000 in Greater London) applies. These thresholds consider the combined gross income of all mortgage applicants.
Shared ownership remains a valuable tool for individuals seeking stable homeownership amidst soaring property prices and income fluctuations.
