Shared Ownership Process - YouTube

Maybe you're sceptical of the shared ownership scheme shall I shan't I is it

wasted money do I ever own the property in this video

I discuss the most common questions and also the process and how to work out if

you qualify for the scheme let's get to

it whats up Alex Kerr from Mortgage Chain and on

this channel we provide the best tools and tips to first-time buyers if we're

meeting for the first time please consider subscribing let's jump into the

video so what is shared ownership shared ownership is where you purchase a

percentage of a property and rent the remainder from the Housing Association

typically you would buy a share starting at 25 percent 35 and 50 are also common

starting points with the idea of purchasing the remaining shares later on

down the line shared ownership is also commonly used as a stepping stone onto

owning properties outright later on because it is considered better than

renting outright so do I qualify that is the most common question I get also a

lot of people will go to the affordability calculators to see how

much they can borrow without putting in the rent from the Housing Association

and associated service charge cost and annual ground rent so in regards to

affordability I have worked out a calculation which works out in the

majority of cases so let's say you were looking to purchase a shared ownership

property which full value was two hundred thousand pounds now Housing

Association calculations do vary but the majority of the time if you take 12 and

a half percent of the full purchase price that is what your salary pretty

much needs to be to qualify for the affordability so two hundred thousand

your salary would need to be around twenty-five thousand now in some

instances I've seen it work out to as little as ten percent of the full

purchase price so in this instance 20 thousand would qualify and then in other

examples where the Housing Association calculation is more strict occasionally

fifteen percent would be the marker so in this instance 30,000 but generally

speaking twelve and a half percent is a really good and accurate figure to use

at the time of this video another common question how much rent will I pay now

normally if you're looking for properties on Rightmove Zoopla on the

market it will lay out most of the time what the rents the ground rent the

service charges however there are a lot of instances when agents do not put any

of the associated costs onto the advert so what you need to do there is work out

the remaining share so 200,000 let's say you were purchasing 30% which would work

out at 60,000 that means you're renting a hundred and forty thousand from the

Housing Association which is the remaining 70 % now if you take

that one hundred and forty thousand and times that figure by 2.75% you'll find

that equals three thousand eight hundred and fifty pounds divide that by

twelve you're looking at three hundred and

twenty pounds per month or the rent that you would need to pay to the Housing

Association now again sometimes it works out a

little bit higher as high as 3% I've known not really lower than two point

seven five so give you a really good marker if you use three percent over all

that should cover any other costs such as ground rent and service charges so

what is a Housing Association Housing Association is the company which owns

the property and sells you a percentage of the property and will rent you the

remainder it is their responsibility to make sure everything's kept in order and

clean and also provide buildings insurance should anything happen to the

property stair casing this is where you purchase further shares later on down

the line always make sure you are able to

purchase 100% of the share at a later date if the Housing Association does not

permit it do not buy the property as you will find it hard to get a mortgage is

it worth buying a shared ownership property again on previous videos I've

done on YouTube there has been big debates around is shared ownership worth

it's a lot of pros a lot of cons there's mixed opinions here with a lot of

negativity towards housing associations however this is my opinion shared

ownership isn't always a long-term goal it is fantastic for using just as a

stepping stone to get onto the property ladder to then buy your own property

outright later on down the line sometimes shared ownership will provide

you the property you need as a family where beforehand without the scheme you

wouldn't have been able to afford a property what you required for you and

your family you can buy shared ownership property get the mortgage balance down

and then sell it within the near future and use that as your deposit on buying a

property outright you may have salary increases along the way my opinion is

that shared ownership is better than renting outright when these two schemes

are put next to each other because you own a percentage of the property and you

are repaying a mortgage debt which can be used as a deposit for your next

property later on down the line so I have put in the show notes a recap of

the calculations used when understanding affordability and associated costs as

well as a free guide which I've just produced it's a tick list of items that

you must check with the Housing Association when considering shared

ownership make sure to download that and make sure you cover off every item in

the list question of the day does shared ownership provide a stepping stone onto

the property ladder for you let me know in the comments so if you'd like to

understand your shared ownership options whether you can go onto the property

ladder or not and you'd like a free chat with me

just click the link to my diary in the descriptions below and choose a suitable

time and day and select analysis call this is a free no-obligation 10 minute

chat to understand your options please note we are obliged to tell you that

your home may be repossessed if you do not keep up repayments on your mortgage

so thanks for checking out today's video please do check out a show notes for a

recap on today's content and if you're new to this channel please consider

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mortgage chain to bringing the best tools and tips to first-time buyers have

a beautiful day and we'll see you in the next one