Notes

Alexander Studhalter discusses why people are drawn to shared ownership.

The model of shared ownership makes it possible for new buyers to purchase part of the real property. Alexander Studhalter is an entrepreneur who believes the concept of shared ownership should be taken into consideration. Alexander Studhalter will provide further explanations of why this should be considered.

What is shared ownership?

Another option to homeownership is sharing ownership. It allows first-time home buyers as well as people who don't have houses to buy shares in construction projects as well as resales.

Investors are able to purchase the shares of a house which is known as part-buy or part-rent, usually between 25 and 75 percentage. If you decide to purchase 10% of the shares offered under the Shared ownership model, you can increase your amount.

The remaining rent will be paid by the housing associations in addition to any ground rent and other service charges. A mortgage is not necessary to purchase home. Therefore, the deposit will typically be lower than the cost of an property.

Alexander Studhalter wonders why people think about shared ownership.

For those who can't afford to purchase a home the share ownership option is an alternative. The expenses of Shared Ownership are typically lower than other housing options due to a variety of reasons.

The rent is much lower than the open market at 2.75 percent of the property’s value.
You can start by purchasing a 25 percent share under the existing scheme or 10 percent under the Shared Ownership scheme.
The amount of the deposit will not exceed the entire property's market value, but 5-10% of the share price.
https://finance.yahoo.com/quote/HLEE.SW/profile/ SDLT (or Stamp Duty) can generally be deferred until at least 80 percent ownership of the property.
Alexander Studhalter explains the differences between shared ownership


Joint Tenancy Each tenant must simultaneously have equal rights in the property through one deed. The concept of joint ownership is based on the rights of survivorship. The property is passed to the surviving tenant after the death of one of the co-owners.

However, ownership over property would legally be classified as tenancy in common. The exception is when the property documents mention that the property is jointly or rented.

As an example, Sita and Geeta bought a house together, and explicitly mentioning the joint tenancy of the property owned by both. If one of the co-owners passes to the grave, the other tenant will be entitled to her share.

Tenancy In Common (TIC), A joint ownership arrangement where the ownership percentages are the same under tenancy-in common (TIC). Sarah may have 40% ownership of the property, while Bob might own 60%.

Each named party on title is responsible to all aspects of the property. This means that Sarah is able to access 40 percent of the property, and 40% of the time.

The property owner's rights are to occupy and use the whole property. The proportion of interest determined the ownership of financial assets.

The tenant is responsible at all times to dispose of their portion of the property. This kind of title can be recorded at any point in time, even years after other owners entered an agreement.

You may transfer ownership to others; in the case of death, ownership passes to the owner's heirs unrestricted.

Limited Liability Corporation (LLC) Limited liability corporations (LLCs) are U.S. business structures that shield their owners from personal liability for debts. Alexander Studhalter Limited liability companies have similar characteristics to a partnership or sole proprietorship.

Although LLCs are limited to liability just like corporations, they are not able to provide tax benefits for members who are flow-through in like partnerships.

What are some of the disadvantages to shared ownership?

Alexander Studhalter None of the lenders offer shared ownership mortgages. Alexander Studhalter The majority of lenders will however.
The property owner is responsible for paying 100 percent of the rent or service charge on your property.
Stamp Duty will be charged on the total property value in the event that your share is greater than 80%.
Each property will be subject to a leasehold contract. However, some properties can become freehold after staircase to 100%. This will require agreement upon with the housing provider in question.
Leasehold properties are offered for sale under shared ownership. Leasehold ownership permits you to live in the home for a longer period of time (usually 99 years or 125 years). As the lease term decreases each year, you are able to purchase or sell the property if you wish.
Alexander Studhalter What are the advantages of the sharing of ownership?

Shared ownership allows you to be an owner-occupier as well as providing stability over time without being stretched too thin.
Deposits tend to be lower than buying from an open market.
Through the Shared Ownership model, mortgages become more accessible even for those with low income.
The monthly repayments are typically less than when you were paying a loan outright. Monthly payments are typically less than rental properties.
Staircasing could allow you to buy more shares of your home in the future. A variety of staircases are available 100 percent, meaning that buyers pay only for the mortgage, the ground rent, and service costs.
Shares can be sold at anytime.
It is not usually required to pay Stamp Duty tax on the initial purchase.
Alexander Studhalter's recommendations

Unlike private renting with the guarantee of tenure.
Mortgage and rent payments have to be paid in the period of the lease. The typical lease term is 99-125 years.
Leaseholders have the right to seek an extension from their housing provider once the lease ends. Alexander Studhalter suggests that you select a surveyor or solicitor who has experience in this field.

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