Recently the statistic came out citing that the average length of time for someone in the UK to save up for a deposit for a house is 10 years (or 15 years in London). If you’ve ever had to move home to live with your parents or got to the stage of being sick paying rent to pay your landlord’s mortgage (and the thought of 10 years of that is terrifying) then we have great news about how co-ownership can help you can get onto the property ladder!
So Co-ownership has been around for quite a while and has helped thousands of people get onto the property ladder. Co-ownership isn’t a long term solution for most people but is a great ‘leg up’ to get you going.
Co-ownership means you simply buy a share of a house and Co-ownership buy the rest. This means that you pay the mortgage on your proportion of the house and pay Co-ownership rent on their bit, and here is the game-changer, you don’t need a deposit!
Co-ownership is a really affordable way of buying a house. You will pay your mortgage on the portion that you own and then pay rent on the other part. Rent is charged at 2.5% of the value of the Co-ownership share of your home e.g. if your home is valued at £120,000 and you own 50% the annual rent is £1,500 or £125 per month.
If you saw a house you wanted to buy at £120,000 – normally you would need a 10% deposit (£12,000) and your repayments on a 35 year mortgage would be £367 / month (on a 2.18% deal).
With Co-ownership, you could put down £0 deposit – your rent and mortgage combined (on a 50/50 Co-ownership deal) would be a total of £345 / month!
Check out the monthly rental table below to get an idea of how much rent you would pay
The majority of applicants are first time buyers, but it can also help people who have owned a house before. The key criteria are:
• You are over 18 and live in the UK
• You do not currently own any property or land anywhere (exception for Co-ownership Portability cases)
• You will live in the property as your only residence and will not use the property for business purposes
• You have an adequate right to reside in Northern Ireland
• You have had no Payday Loans or Home Credit within the last 12 months
• Any Debt Relief Orders, bankruptcies or Individual Voluntary Arrangements must have been satisfactorily completed at least 6 years before applying
• You have no outstanding adverse credit at the time of making a Co-Ownership Application
• You can choose to own between 50%-90% of the property.
• You can buy a house using Co-ownership up to a maximum value of £165,000.
• You need to be in your job 6 months (or have 2 years accounts if self-employed).
• Affordability checks will be carried out by the lender.
• You can take mortgages out up to 35 years with 2,3, or 5 year deals – either fixed rate or variable.
• You can stay on Co-ownership until the end of your mortgage term (although you will still only own a proportion of your house then).
• There is an assessment fee of £70 and a property fee of £430 that covers your valuation fee and most of the legal fees involved in purchasing your home.
• If your house depreciates in value, if you sell it, you only have to repay the same proportion that you own – the same goes for if it increases in value.
You can apply as an individual, with your partner or even with a friend. Co-ownership isn’t for everyone and we have access to some incredible deals that
may be a better solution for you but Co-ownership offers many people a door into property ownership that otherwise would be unattainable or a long way off.
Everyone’s circumstances are different – get in touch with the Crawford Mulholland Team to book an appointment to see what is the perfect deal for you and your situation.