Wondering how much you’ll need to fork out for a Shared Ownership property? Let our guide fill in the blanks.
Struggling to buy a property in London at a reasonable price? Shared Ownership could be the answer to your prayers. Saving you the trouble of saving a huge deposit, the scheme enables you to buy just a share of your home, while you rent out the rest.
But while Shared Ownership offers a more affordable path to home ownership, you’ll still need to make some smart budgeting decisions to get there. Wondering how much you’ll need to fork out for a Shared Ownership property? Let our guide fill in the blanks.
How much deposit is needed for Shared Ownership?
With Shared Ownership, you can land your dream home by purchasing a share of your home, while renting out the remainder of the property. The cost of your deposit will depend on the value of the property, and the share size you buy – you can buy a share as little as 10%, or as big as 75%.
If you start with a share size of 20%, and your property is worth £300,000, your share price will be £60,000. That means if you put down a deposit of 10%, you’ll need as little as £6000 to get your home-owning journey started.
You can find out exactly how much deposit is needed by checking out our calculator here.
How much is rent on Shared Ownership?
Once you’ve put your deposit down, you’ll also need to consider how much rent you’ll have to pay. You will only be required to rent out the portion of your home still owned by your housing provider. Luckily, the rent you pay on Shared Ownership is around 20% cheaper than the London average, giving you extra breathing space to save for your first home.
Usually, you’ll be expected to pay around 3% of the share that you don’t own. For example, if you buy a 50% share of a home valued at £250,000, you would need to pay rent on the remaining £125000. Given that 3% of £125,000 is £3750, your monthly sum would be £3750 divided by 12 = £312.50.
How much does it cost to staircase in Shared Ownership?
One of the great perks of buying a Shared Ownership home is that you’ll eventually get the option to own more of your property – maybe even 100%! Staircasing is a process where you buy another share of your home, which increases your mortgage repayments, but reduces the amount of rent you have to pay.
So how much does staircasing cost? On average, it costs around £2000 to buy an additional share of a Shared Ownership home. However, this largely depends on the value of your property, as well as the share you are buying.
For example, a 10% share of a home worth £250,000 is £25,000, which means that a 10% deposit is £2500. You’ll also need to take account of additional costs like valuation fees, mortgage fees, and potentially stamp duty!
Are there any added Shared Ownership Fees?
Shared Ownership might make home buying more affordable, but that doesn’t mean you’re free from added fees. When you buy a share of your home, you’ll need to make sure you’ve saved enough for things like solicitor fees, stamp duty and service charge.
Fortunately, these added fees will be much less than when you buy a private sale property – reflecting the size of the share you bought.
At BE WEST, you can use Shared Ownership to purchase a stylish new home in the thriving of West London. With a selection of apartments for sale in places like West Drayton and Acton, you can get your home-buying journey underway today