Shared Ownership is a Government scheme that allows homebuyers to take out a mortgage on a percentage of a property. The government introduced the scheme to help those struggling to save for a mortgage deposit.
If you are hoping to move up the property ladder within the next year, this scheme could provide the boost that you need.
How does the Shared Ownership scheme work in Newcastle?
When you purchase a home using the Shared Ownership Scheme, you’ll only be purchasing a percentage of the property value, which can vary from 10-75%. The mortgage you take out will only cover the percentage you are purchasing, not the full value of the property.
The costs balance out; think that your mortgage payments are going towards a percentage of the property that you own. If you own 25% of the property, your repayments are based on this amount and your rent is based on the 75% that you do not own.
What deposit do I need for Shared Ownership in Newcastle?
A bonus to the Shared Ownership Scheme is that you only put down a deposit on the percentage that you are buying. If you are looking to take out a 25% share in a property valued at £200,000, you would be taking out a £50,000 mortgage and therefore, your initial deposit could be as little as £5,000.
This is a great perk to utilising Shared Ownership in Newcastle; it helps those struggling to save for a deposit move into a new property.
How do I qualify for Shared Ownership in Newcastle?
To qualify for the Shared Ownership Scheme, your household income must be less than £80,000. You must also not be able to afford all of the deposit and mortgage payments for a home that meets your needs.
Unlike other Government schemes, Shared Ownership is available to all types of buyers, not just exclusively first time buyers in Newcastle. This means that if you are moving home in Newcastle and need help saving for a deposit, you could utilise this scheme to give yourself the boost that you need.
Can I eventually buy 100% of the property?
If you are looking to own 100% of your property, you should consider ‘staircasing’. Staircasing is where you increase your percentage share in the property over time. Usually, you can increase the percentage that you own as and when you come into the funds.
Remember that because your share is increasing, your rent payments will reduce but your mortgage payments will increase.
Can I sell my home if I have a Shared Ownership mortgage in Newcastle?
If you have found that living in a Shared Ownership property is not right for you and you want to move out, selling up is not as easy as it is when you have 100% ownership over a property.
Whether or not you can sell your home entirely depends on how many shares of the property you own. Typically, you need to own the whole 100% before being able to sell it.
It is important to note, however, that the housing association will usually have ‘first refusal’ rights, for the first 21 years after you have bought the home. This means they are, by law, able to make an offer to buy the property themselves, before you put it on the open market.
If you do not own 100% of the property, you will have to look at purchasing the remaining shares of the property in order to then look at selling it.
Is Shared Ownership right for me?
Everyone’s situation is different and there is no way for us to determine your suitability without you getting in touch. Our mortgage advisors in Newcastle have been working with Shared Ownership applicants for many years now, and we are able to our full support throughout your entire mortgage journey.
Shared Ownership in Newcastle can be made easier when conversing with a mortgage broker in Newcastle. You can book your free mortgage appointment with a mortgage advisor in Newcastle for free! Head to our online booking area and select a date and time that suits you best.
Date Last Edited: July 10, 2023
