To buy? To rent? It’s the age-old debate.

With house prices, mortgage rates and rental costs all on the rise, now more than ever is the right time to take a closer look and really consider all your home buying options. For instance, have you thought about an alternative like Shared Ownership? Shared Ownership provides a great stepping stone onto the housing ladder as the scheme allows you to part buy, part rent your home with a low initial deposit.

Thanks to the recent pandemic and the following cost of living crisis, we know times are unpredictable financially at the moment, so that’s why we think there is no better time to consider a shared ownership scheme than right now. It’s the best of both worlds: part renting and part buying.  In this blog we’ve put together some key differences between renting, buying outright and shared ownership so you can weigh up your options and decide what really works best for you...
 

Buying with Shared Ownership VS Renting

One in five households in the UK now privately rent rather than owning their home outright. With mortgage rates still continuing to rise, there has been a growing shift in those turning to rental options instead. Renting privately can be considered a more flexible option as there is less commitment involved. Tenancy agreements tend to be for shorter periods of time, allowing you to leave earlier should you change your mind about location or property. In most cases the deposit required for a rental property is equivalent to one month’s rent and some rental properties also come fully or part furnished, resulting in fewer upfront costs. Effectively you can try before you buy.
 
However, you don’t have any freedom to personalize or make your mark on your home as it is not yours. You are subject to a landlord who can ultimately call time on your tenancy when required, making your stay uncertain. The prospect of long-term renting does not equate to security. Private renting undoubtedly has its advantages in the short term, but if you’re looking for long term security it may not always be the best choice.
 

The Benefits of Shared Ownership Compared to Renting

The main advantage of shared ownership typically means lower rents. With current average private rental prices in the UK at £825pm, the highest ever recorded, your monthly rental costs through a shared ownership scheme could be significantly lower, as you only pay rent on the remaining share of the property rather than the whole property. Another benefit is that you are also building up equity in the property. For many the main objection when it comes to renting is that you are “throwing money away every month”. Not with shared ownership. The money you pay will go towards building your equity in the property.
 
You have the added bonus that you can decorate your home as you wish. With greater freedom for personalization and modifications than traditional renting, you are able to put your own stamp on the place and make it feel truly like home. You also have more stability, with no landlord able to end a tenancy agreement with little notice, you have the peace of mind that you cannot be suddenly displaced.

 

Shared Ownership VS Buying A Home

For many people their main ambition is to become a homeowner. It’s the ultimate status of security and investment. However according the to the UK Census, we are seeing a decrease in the number of people owning their own homes from 64.3% of households in 2011 to 62.5% in 2021. However, the home buying process can be long winded and costly. Not only does it take longer to save for the initial deposit but there are other legal costs involved, time restraints, especially if buying as part of a chain, and mortgage implications. With mortgage rates on the rise, these increasing costs are placing ever more financial pressure on homeowners.    
 

The Benefits of Shared Ownership Compared to Buying Outright

Shared ownership is undoubtedly the more affordable route to owning your own home as you need a lower initial deposit. As you are buying a share of the property rather than buying outright you only need a partial deposit. You only need to provide a deposit for the share you are purchasing which could be as little as 5%. This makes it more affordable to get onto the housing ladder. Not only that but your monthly mortgage payments will also be smaller as your mortgage is for a share of the property and therefore smaller.
 
Homes that are accepted for shared ownership schemes tend to be new build properties, so you have fewer worries about fixing or replacing old fixtures and fitting and they require less maintenance in the long term. Not only that but new builds also come with a 10-year warranty so there shouldn’t be any hidden costs or long-term repairs to budget for.
 
Of course, the main benefit is the fact that you will still own your own home with the chance to buy outright at a time to suit you. This gives you the advantage of getting onto the housing ladder much more quickly and the chance to plan ahead with your payment options. You have the security of knowing that you are still making a sound investment and you are a homeowner in your own right.

 

Why we think Shared Ownership is right for right now

With shared ownership you essentially get the best of both worlds. A foot on the housing ladder without the need to save for a huge deposit, the option to buy the remainder of the property at a later date, giving you chance to navigate the mortgage/rental increases and budget accordingly and ultimately initially lower monthly rent costs.

Many of the shared ownership purchasers have stated that they are now paying out the same or less a month to own a share of their property compared to when privately renting. With shared ownership you can have your dream home sooner than you think. If you feel this may be the best option for you right now, have a look at our exclusive range of homes available and get in touch with our dedicated team for more information.   
And if you are still undecided about shared ownership, check out our handy blog here to help put your mind at ease and put some of the myths and misconceptions about shared ownership firmly to rest.