The reality of home ownership is that fully owning your own home is slightly out of reach for most first-time buyers. However, there might still be a happy middle ground available for aspiring home-owners. Part buy, part rent is an excellent alternative for anyone itching to own their first home, without the funds to do it straight away. But what exactly is it? Find out all of the answers below:
How does part buy part rent work?
Part buy part rent, also known as Shared Ownership, is a government-funded scheme where you can purchase a share of a property, and pay rent on the part that you don’t own. This starts out with you paying a percentage of anywhere from 25% to 75% of the home, resulting in a smaller deposit that is around 5-10% of this share.
So this just leaves the question, how much rent do you pay on a Shared Ownership home? On average, the rent that you pay on your home will work out as 3% of the value of the share you don’t own. In other words, the bigger the deposit you save, the better!
Am I eligible for Shared Ownership?
You might love the idea of Shared Ownership, but first you need to work out if you are eligible! If you want to take advantage of the scheme, make sure you fit the following criteria:
- You need to be at least 18 years old.
- If you live outside of London, your annual household income must be less than £80,000.
- For those living in London, your annual household income must be less than £90,000.
- You cannot own another home if you want to buy through Shared Ownership
- However, you don’t need to be a first-time buyer to use Shared Ownership - as long as you are in the process of selling your home!
- As Shared Ownership is directed at people struggling to get on the housing ladder, you will need to prove that you can’t afford to buy a home on the open market
- You also need to prove that you have a good credit history, so make sure that all of your important documents are in order!
What are the benefits of Shared Ownership?
You pay a smaller deposit
The biggest advantage of Shared Ownership is that it is much more affordable than buying a home outright. Because the deposit you pay is smaller than for the average home, you’ll get to save time and money, while enjoying the wonders of home ownership!
Most Shared Ownership properties are brand new
If you decide to buy through Shared Ownership, you’ll get access to some of the finest homes on the market. Most Shared Ownership homes are new builds, giving you the option to decorate your home as you see fit, and make use of some of the latest appliances and fixtures. This means that you won’t have to worry about paying for fixes or repairs anytime soon.
It’s a route to full home ownership
Part buy part rent wasn’t devised so home-buyers would own part of their property forever. Instead, it’s designed as a bridge to nudge you gently towards full home ownership! If your financial circumstances change, you have the option to buy more shares of your property through ‘staircasing’, which eventually culminates with you owning your home entirely. Best of all, the more shares you buy, the cheaper the rent you pay! Find out how you can staircase your way to home ownership here.
With Square Roots, you can use Shared Ownership to find a high-quality home in an area you love. But if you find that Shared Ownership is still out of your price range, you can also take advantage of Affordable Rent, which allows you to rent a home at 80% of the market rate! Find your dream home today by using our property search.< Back to News & Events