As a long-term resident and professional in Burnley’s real estate world, I am well aware that buying a house can seem scary, especially given the current financial state. For those looking to buy a house, a good option may be shared ownership. This system lets you buy part of your house and rent the rest. This could be a good way to own a house, but it has its own details. As a local real estate expert, my goal is to help you understand these details. This guide will explain the pros and cons of shared ownership in Burnley and give you the knowledge to make a good decision.
Shared ownership is becoming more favoured amongst those looking to buy a house in areas like Burnley. It means you purchase a part of a property (usually 25% to 75%) and rent the leftover bit. This option makes owning a house easier by lowering the initial costs, as you only need a mortgage for the part of the house you’re buying.
With any house buying decision, it’s important to know what you’re getting into. First off, who can get shared ownership? It’s mostly for first-time buyers, those who once owned a house but can’t afford one now, and households earning £80,000 a year or less (£90,000 in London). So, in Burnley, shared ownership could be a good option for quite a few people.
Another thing to think about is the total cost. While shared ownership means you can buy a house with a smaller deposit and mortgage, you’ll still have to pay rent for the part of the house you don’t own. This rent is usually less than market value, but you should still include it in your budget. There might also be other fees like service charges, ground rent, and maintenance costs, depending on the property and the management agreement.
It’s also good to remember that there are rules about selling a shared ownership house. You may have to offer the housing association the ‘first refusal’, which means they get the first chance to buy the house back from you. If you want to increase your share in the house (known as ‘staircasing’), your progress may be affected by the house’s price and your financial situation.
Lastly, it’s important to remember that shared ownership houses are usually leasehold, which means you technically own the house for a set period (usually 99 or 125 years). There may be rules about what changes you can make to the house, and you might need to pay fees if you want to extend your lease. Be sure to research thoroughly and seek professional advice if needed to understand these consequences.
Getting your head around the shared ownership path can be tricky, especially for first-time buyers. But, with careful thought, budgeting, understanding of the system, and perhaps some professional advice, you can take advantage of this housing system. As with any house purchase, make sure to consider all factors before making a choice.
In conclusion, shared ownership is a fantastic way for potential Burnley house buyers to get onto the property ladder. It can be particularly helpful for those who can’t afford to buy a house outright. But, like all house purchases, it’s not without potential downsides. It’s essential to investigate and consider things like ongoing rent costs, potential fees, resale rules, and leasehold ownership conditions. Deciding on a house is a big decision, and understanding shared ownership can help you make a choice that benefits you the most.