Help to Buy: Shared Ownership vs. Renting
As house prices rise, so does the price in rent which in turn makes it increasingly difficult for first time buyers to step onto the property ladder.
The latest Halifax House Price Index shows that house prices are 2.6% higher in the three months to March 2019 compared to the same three months the previous year.
According to a survey conducted by the Royal Institution of Chartered Surveyors (RICS) in August 2018, rent prices were expected to rise faster than house prices.
Due to the increase in house prices, the demand for rental accommodation is greater than ever and is expected generate a rise in rent prices. However, Government schemes such as Help to Buy: Shared Ownership are helping more and more first time buyers own a proportion of a property and begin the journey of moving away from renting.
The Shared Ownership scheme continues to help support buyers and play a positive role in the housing market. Shared Ownership allows you to buy a share in a property between 25% – 75% of the purchase price, whilst paying rent on the remaining share. Unlike purchasing on the open market, you only need to raise a deposit for the share you are purchasing, which means Shared Ownership can often be a more affordable alternative to renting or buying on the open market.
It is not uncommon for families who rent to spend more than half of their income on their home, which can make it impossible for anyone trying to save money for a deposit – it just means renting for longer while trying to save to buy a home. With Shared Ownership, you only need a 5% deposit of your share rather than 10% of the full market value, cutting your saving time in half but still allowing you to live in a home that’s suitable for your family.
If you’re unsure of what you can afford, we have a panel of approved Financial Advisors on our website who can give you free financial advice. There is also a Mortgage Calculator on our website page which can show you examples of monthly costs when buying.
To buy a home with the Shared Ownership scheme you will first need to be registered with the Help to Buy Agent for the area you wish to buy in. Help to Buy South’s geography covers Hampshire, Wiltshire, Berkshire, Oxfordshire, Gloucestershire, Bristol, Bath and North Somerset. If you are not registered with us, click here to find out more or click here to find the Help to Buy Agent you’d need to register with.
If you are interested in Help to Buy: Shared Ownership but would like to know a bit more, read our handy Shared Ownership guide here.