31st August 2017
Shared Ownership was originally introduced in the late '70s to help people struggling to buy a house to get a first foot on the property ladder. The scheme is now provided by housing associations and offers the purchase of a share in a property, usually between 25% and 75% of its value. The housing association owns the remaining share, for which the shared owner pays rent. It's not unusual for the shared owners' monthly mortgage payments and rent to add up to less or the same as they used to pay while renting a home privately.
Curo is one of the largest housing associations in the South West, with Shared Ownership homes available across the region. Beth and Cory, both in their late 20s, moved in to a two-bed end of terrace maisonette at Curo's Drew's Meadow development in Devizes with their two-year old son earlier this year.
Beth, a post lady, and her partner Cory, who works as a tradesman, previously lived in a privately rented property in Devizes for two and a half years. Beth said: "Our friends attended one of Curo's open days and mentioned the new development to us. Because we lived so close we could watch the homes being built and we became interested in the types of properties that were going to be available.
"We contacted Curo who advised us to register with Help to Buy South. We then provided Curo with our reference number to carry out the affordability assessment and that's how the process started. We are first time buyers so we found it very reassuring to be kept informed on the progress of the property and the purchase by Curo's sales team."
How it works
Lisa Howells, Curo Sales Director, explains how Shared Ownership works: "This housing scheme is a stepping stone for people and families working towards owning a home outright. It means that they are able to buy what they can afford, giving them the breathing space they need in order to make the next step - either purchasing additional shares in their home in 10% increments, or moving on to another property."
Buying further shares in the property is a process known as 'staircasing' and can normally be exercised up to 100%. Rent paid by the shared owners will reduce every time they staircase. Once they reach 100% they become outright owners and no longer need to pay rent.
This is something Beth and Cory are already thinking about. "It would depend on our financial situation, but yes, we would like to staircase," said Beth. "For the time being we like having more space for the three of us, especially our two-year old, who can run around and enjoy the garden. We're pleased with the added security of living in our own home rather than renting and not knowing whether we might be given notice to leave.
"We're hoping to stay in this property until our family expands; we may require an extra room but both bedrooms are very big so we could look at splitting one of them.
"The area is very familiar to us as we only lived around the corner so we knew we were going to like it here. Our family is close to us and we even have friends living on the development which is nice."
Shared Ownership from Curo is available to first-time buyers, or those who used to own a home but can no longer afford one, with a combined household income of less than £80,000.
Lisa said: "We have Shared Ownership properties available in various locations in the South West, including at our flagship Mulberry Park development in Bath. They usually get snapped up pretty quickly, but we release new homes periodically and they will all be advertised on www.curo-sales.co.uk."
For Beth's family, being able to buy their home through Shared Ownership means that they can stay in the area they love for as long as they want to. Beth said: "I would definitely use Shared Ownership again, I think it's a really good scheme. With me only working part-time I didn't think we would be able to get something as nice as this."
Shared Ownership in numbers
Based on the price of a two-bed semi-detached property recently sold by Curo in Bath & North East Somerset, £260,000, here is a basic example of how Shared Ownership works:
-Property price: £260,000
-Buyer / Curo share: 40% (£104,000) / 60% (£156,000)
-Buyer's deposit: 5% of 40% share (£5,200)
-Mortgage required: remaining 35% (£98,800)
-Monthly rent for the share owned by Curo: £357.50
The monthly mortgage payments will depend on the buyer's specific circumstances. On top of this, Shared Ownership buyers will also have to budget for monthly service charges, which will vary from one property to another.
The figures shown above are for illustration purposes only. What you can buy depends on meeting the criteria, your affordability assessment, the share you buy and the mortgage deal you are able to secure. Your circumstances are unique and you should always seek advice and recommendations from an Independent Financial Adviser regarding mortgage products, affordability, interest rate, terms, conditions and method of repayment.