Shared Ownership Mortgages with No Broker Fee To Pay

Shared Ownership was originally launched to help low income families get a foothold on the housing ladder by initially purchasing a part share in a property and paying rent on the residual share. As local authorities built less and less new ‘council houses’ (and sold off a large chunk of their stock through the Right to Buy scheme) social housing bodies like housing associations emerged to provide alternative housing options.

With ever rising property prices shared ownership is appealing to many first time buyers as a means of getting a foothold in the market. As stated, you initially purchase a share in the property – typically ranging from 25% to 50%. Over time, as your income or affordability improves, you can purchase further stakes in the property – known as ‘staircasing’.

In addition to the mortgage payment you pay a monthly rent to the housing association on the part of the property owned by them. If the property is a maisonette or apartment there will also be a monthly service charge / annual ground rent payable.
Be aware that the monthly rent payment is taken into account by the mortgage lender, along with any ongoing credit commitments, when calculating how much they will lend.

Disappointingly, lenders who accept shared ownership are in the minority at present.
Those who do lend have differing mortgage criteria i.e. some will lend 100% of the share you wish to purchase, others only 95%. There are schemes available that allow for damaged credit history.*

The downsides of shared ownership can occur on future resale – as you have only purchased a part share of the property your benefit from any increase in value is pro rata to the share owned.
When selling, you have to find a buyer who is who is acceptable to the housing association and a shared ownership lender.

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