Q. I’m considering shared ownership to help me step onto the property ladder; can you tell me more about this option?

A. Shared ownership mortgage schemes are a Government incentive backed up by developers and housing associations in order to provide high quality affordable housing for first time buyers and other key workers. The shared ownership mortgage scheme works by property buyers ‘sharing’ the ownership of the property. On the initial purchase you will typically buy 25/50/75% of the total property value. The remaining percentage of the property is owned jointly, usually with a housing association. They charge you a ‘rent’ for the section you do not own. The main benefit of getting a shared ownership mortgage is that you get a foothold on the property ladder and benefit from the increase to the value of your ‘share’.

Also these schemes are unique in that you can ‘staircase’ up your ownership of the property; meaning you have the ability to buy additional sections of the property at a later date. Therefore you can start off by buying 50% of the property initially, then in 2 years buy another 25% and finally the last 25% so you own the entire property.  As you increase your ownership of the property your rent decreases to reflect the increased ownership. It’s a great opportunity for individuals that fall short on earnings for a regular mortgage especially in this market where lenders and their lending criteria are a lot tougher than the pre – credit crunch days.