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  • Writer's pictureRicky Gandhi

Right to shared ownership scheme mortgage

Table of Contents

  1. Introduction

  2. How does Right to Shared Ownership work?

  3. Eligibility for Right to Shared Ownership

  4. How to apply for Right to Shared Ownership

  5. The benefits of Right to Shared Ownership

  6. The drawbacks of Right to Shared Ownership

  7. The costs of Right to Shared Ownership

  8. How to get a mortgage for Right to Shared Ownership

  9. The future of Right to Shared Ownership

  10. Conclusion

Introduction

Right to Shared Ownership is a government scheme that allows people to buy a share of a property and rent the rest from a housing association or local authority. This can be a great way to get on the property ladder if you can't afford to buy a property outright.


How does Right to Shared Ownership work?


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With Right to Shared Ownership, you buy a share of a property, usually between 25% and 75%. You then pay rent on the remaining share to the housing association or local authority. You can buy more shares in the property over time, up to 100%.


Eligibility for Right to Shared Ownership

To be eligible for Right to Shared Ownership, you must:

  • Be a UK citizen or have the right to live in the UK indefinitely

  • Be over 18 years old

  • Have a household income of less than £80,000 (if you live in London) or £60,000 (if you live elsewhere in the UK)

  • Not own any other property

How to apply for Right to Shared Ownership

To apply for Right to Shared Ownership, you will need to contact a housing association or local authority that offers the scheme. They will assess your eligibility and help you find a property that meets your needs.


The benefits of Right to Shared Ownership

There are several benefits to Right to Shared Ownership, including:

  • You can get on the property ladder sooner

  • You can afford a larger property than you would be able to buy outright

  • You can buy more shares in the property over time, up to 100%

  • You can sell your share of the property at any time

The drawbacks of Right to Shared Ownership


mortgage

There are also some drawbacks to Right to Shared Ownership, including:

  • You will have to pay rent on the remaining share of the property

  • You may have to pay service charges and ground rent

  • You may have to pay a mortgage on your share of the property

  • You may not be able to sell your share of the property if the market is down

The costs of Right to Shared Ownership

The costs of Right to Shared Ownership will vary depending on the property you buy and the terms of your agreement. However, you will typically need to pay a deposit of at least 5% of the share you are buying, as well as mortgage payments and rent.


How to get a mortgage for Right to Shared Ownership

You can get a mortgage for Right to Shared Ownership from a high street bank or building society. However, you may need to provide a larger deposit than you would if you were buying a property outright.


The future of Right to Shared Ownership

The government has recently announced plans to reform Right to Shared Ownership. The changes include:

  • Increasing the maximum share you can buy to 95%

  • Making it easier to sell your share of the property

  • Introducing a new type of shared ownership called "part-buy, part-rent"

Conclusion

Right to Shared Ownership can be a great way to get on the property ladder. However, it's important to be aware of the costs and drawbacks before you apply.


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