Shared ownership mortgages are aimed at helping potential first time buyers to get on the property ladder, as this is increasingly becoming an almost impossible task for many. According to recent figures, only around 1 in 10 new buyers are currently first timers - but just because you can't afford to buy the whole of the house, that doesn't mean you can't get your foot on the first rung! Buying with friends or family can be a practical way to start, especially in a market of increasing house prices.
The pros of shared ownership mortgages
The good news is that more and more people are deciding to purchase a property together.
But if you decide that buying a property with friends is for you, remember there is a lot to think about.
The cons of shared ownership mortgages
Case Study: Liam from Moneyfacts
"Because getting on the property ladder is virtually impossible with current house prices rocketing, buying a house with my best friend seemed the only way to go. With the help of Moneyfacts mortgage search, we spoke to a financial adviser and bought a £140,000 2-bedroom property last August, taking out a two year fixed rate deal. This was great for us because we knew exactly how much we'd have to pay each month.
We are already seeing the benefits – one year on and houses on our street are touching £160,000. If shared ownership is for you, make sure you think about all the added extras though. Gordon Brown's stamp duty is a particular nasty, so are solicitor's fees and surveying costs, not to mention the expense of decorating the property when you move in!"
If a shared ownership mortgage is for you, work out:
The deed of trust
Before signing on the dotted line however, it is essential that you get all the legal documents drawn up first, the most important being a deed of trust.
Buying a house with friends or family can be the first step onto the ladder, but remember that it can also mean less stability on the climb up, so make sure that you're aware of all the potential pitfalls before finally taking the plunge.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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