Collaborative Post
The schemes of shared home ownership allow the buyers that meet their eligibility criteria to secure a mortgage or buy a stake in a property as they pay rent to the private developers who are the owners of the building. The rent you will pay, especially on the remaining share, gets shared at a discount rate. Below are the downsides of shared homeownership.
The maintenance charges
When looking at the maintenance charges of a mortgage, you need to be prepared for possible future increases. There are also monthly services that you generally pay for the maintenance and caretaking of the communal area. For example, the maintenance fee can be for roof maintenance. It would help if you considered that despite owning a share of the property, there is a percentage where you are responsible for paying for the shared ownership mortgage complete repair and maintenance costs.
It gets complicated to sell the property
It can get a little complicated compared to an ordinary sale, mainly because you don’t own it all. You will need to give it back to the housing association first, and if they don’t get another buyer in the given timeframe, you have no other option but to market the property yourself. Despite owning 100% of the property, you may not be able to sell it, especially in the open market, because of not owning the freehold.
Subletting
With shared homeownership, it’s hard to sublet unless it’s a case where you’ve staircased total ownership. Also, it’s hard to give more than a room to the flatmates, and you should be permanently living there yourself.
Photo by Maria Ziegler on Unsplash
It is costly
Some may cost you for just asking to get a cat. Also, if you need to knock down your wall or make modifications in the house, you should start by seeking permission from the housing association. Each time you inquire, it becomes costly. In cases where you need a dog or a cat, you’re left with no option but to pay the housing association.
You have no power
You may have some allergies and need to remove the carpet from the house. However, you have to get permission even for the simplest things from the housing association and then pay an extra fee for making a request that dictates the proceeding terms.
Shared homeownership doesn’t give you freedom, and in this case, the housing association has complete control of each request. So, this scheme can make it hard for most of you to be shared homeowners.
Availability
Regarding having a choice for the shared ownership of the property, you will have less choice as some may be subjected to waiting for the lists with a given priority to the armed forces. You will have to go through the buying agent where your interest will get registered, as you will also be given further information.
You’re not in a position to exercise the right of owning the building
This is because it will be run by the house associations, unlike the complete owners of the leased properties. Also, chances are very high for losing your property, especially when falling behind the rent payments.