Shared ownership, also known as equity sharing or co-ownership, involves multiple parties owning a share of a property. Here are the key aspects of shared ownership:
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Property Ownership: Shared ownership involves more than one owner blending their resources to maximize profit and tax deductions. Typically, the parties find a home and buy it together as co-owners, or they join to co-own a property that one of them already owns.
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Buying a Share: Shared ownership allows individuals to purchase a share of a property, usually between 25% and 75%, although this amount can vary. The share can be increased over time by purchasing more shares, a process known as "staircasing".
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Costs and Payments: Those participating in shared ownership pay rent to a landlord on the remaining share of the property and usually pay monthly ground rent and service charges. The rent is less than the rate charged on the open market and is usually charged at a percentage of the property value per annum.
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Leasehold Basis: Most shared ownership properties are leasehold homes, which means that the ownership is like a long tenancy, giving the right to occupy and use the home for a longer period.
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Pros and Cons: Shared ownership offers an alternative route to homeownership, allowing entry into the property market with a lower deposit and manageable monthly payments. However, its important for buyers to weigh up their options and consider the potential benefits and drawbacks of shared ownership.
In summary, shared ownership provides an opportunity for individuals to purchase a share of a property, making homeownership more accessible, particularly for first-time buyers and those who cannot afford to buy on the open market.
