What is Shared ownership?

Posted by admin On December 26th 2020

Typically arranged by housing associations, shared-ownership schemes help people on lower incomes to become owner-occupiers, even if they cannot afford a standard mortgage by themselves.
Shared-ownership schemes enable a borrower to buy a percentage of the property and then pay rent on the remaining. For example, a borrower can purchase a 25% stake in a property, funded by a mortgage, with the option of buying further 25% in the future. As the homeowner increases their share in the property, the mortgage element increases and the rental element goes down.
This process of increasing the mortgage element is sometimes known as staircasing. Be aware that not all lenders offer mortgages for shared-ownership arrangements.