Shared ownership - pros and cons

Whether on the open market, through help to buy, or shared ownership, buying a home is likely to be one of the biggest decisions you’ll ever make. 

So, like all big decisions, you need to consider it carefully and weigh up all options to ensure you’re making the right choice. 

Shared ownership homes are a fantastic option for buyers who may otherwise be unable to buy on the open market. But there are still things to be aware of before you buy your brand-new home.  

We have put together a handy list of some of the pros and cons below. 

Pros 

• You won’t need a huge deposit – This is one of the biggest benefits of shared ownership. You will generally only need a 5% deposit on your mortgage, and as the mortgage is only on a share of the property, this may be as low as £2,000 with Cerris Homes 
• You’ll be on the property ladder – Shared ownership allows you to get onto the housing ladder and take your first steps to home ownership 
• It’s cheaper than private rent – Your monthly repayments will usually work out less expensive than renting through a private landlord, and can often be cheaper than an outright mortgage 
• You’ll have a brand-new home – Most shared ownership homes are new build homes, meaning they come with all the benefits of a new home. This includes better energy efficiency, lower maintenance costs and a ten-year building warranty 

• You can increase your shares in your home – When you can afford it, you’ll have the option to buy a larger share of your home. This is known as ‘staircasing’. You can usually staircase all the way up to 100%, meaning you’ll own your home outright - find out more about staircasing here. 
• Put your stamp on your home – You won’t usually need permission to redecorate, to get new carpets or curtains, or to generally make your home your own. Although you do rent the share of your home that you don’t own, you’re treated more like a homeowner 
• Mortgages are more attainable – As long as you pass the affordability checks, a mortgage on a shared ownership home is more accessible, even for those on lower wages 
• You have security of tenure – It is your home, which means you can remain in it for as long as you wish. This is a much more stable situation than private renting, where your landlord could decide to sell the property at any time 

 Cons 

• You have to pay service charges – You will be responsible for paying any ground rent or service charges for your home. These costs will be made clear to you before you purchase your home 
• You can’t sublet your home - you can seek permission from the housing association to sublet the whole property if you are going away for a fixed period of time, but it cannot be used as a way of obtaining a buy to let property. However, you are able to have a lodger live with you.  
   
• Your mortgage options are more limited – Not all lenders offer shared ownership mortgages. Whilst there are an increasing number of lenders on the high street that do offer shared ownership products, there are still a few that don’t or that require you have a larger deposit than the minimum 5% for their products. A great way to source a mortgage with the right lender for you is through a mortgage broker that specialises in shared ownership. At Cerris Homes we can put you in touch with one when you start the process of purchasing to ensure that you are getting the best mortgage for you and your circumstances. 
• You may not be able to make large home improvements – While you’re free to decorate and refurbish, you may need to get permission from your landlord to do any larger home improvements, particularly structural alterations 

Buying a home is a huge decision. If you would like any more information on shared ownership homes our team are here to help. You can email us at newhomes@cerrishomes.co.uk or call us on 01782 854748.   

We have new homes available to buy now –  find a new home  and discover developments coming soon.