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Shared ownership and other schemes

The high price of houses and how many potential first-time buyers simply cannot afford them has long been a subject of discussion; this situation has now been compounded over recent months by the instability of the current financial climate. However, the government and homebuilders are aware of this, and doing what they can to help. Many of the major homebuilders are offering part-payment schemes, alongside the government’s own "Homebuy" schemes.

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Shared ownership (normally done through a housing association) is a good way for people to get onto the "property ladder" as it allows you to buy a 25, 50 or 75% share of your home with a mortgage, and then pay a small rent on the remaining share of your home. The bigger the percentage of your home that you buy, the lower the rent you need to pay. The other share of the property is normally owned by a housing association, and then you can buy more shares of the property until the home is yours outright. Under a shared ownership lease, you normally have to cover the cost of any repairs yourself, but the housing association will go though this will you at the time of purchase.

Homebuilders are offering similar schemes, where you only pay for a percentage of your home upfront, and then settle the balance on the sale of your home or after 10 years, whichever comes soonest.

On both, Miller Home’s "MiWay" and Bovis Home’s "Jumpstart" programs, they offer selected homes on certain developments around the UK where you will pay just 75% of the "face value" of the home, and they loan you the other 25%. Bloor offer their "BloorHomesStart2" scheme which offers you the chance to buy your home for 80% of the price again paying the remaining 20% in 10 years time.

These schemes are ideal for many first time buyers as it allows them to own their home, without having to raise a deposit or pay rent on the remaining percentage in many cases, though other costs may still apply. The terms and conditions for the schemes vary from company to company, so it is important to read them carefully so you are aware of your responsibilities upon entering into the schemes and representatives of the companies would be happy to answer any questions you may have – you can contact them through the contact forms on their websites.

However you decide to buy your home, remember it is a major financial commitment and you will need to start paying immediately the contracts have been signed. You will need to be aware that there may be stamp duty, legal fees and deposits required, and then there will be the ongoing costs of your mortgage, insurances, and repairs and service charges too. If for whatever reason, you can not keep up your mortgage payments, then your home may be repossessed.


 
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