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Alexander Studhalter on why people consider shared ownership
Shared ownership permits first-time buyers to purchase a portion of real estate. Alexander Studhalter is a businessman who believes that the concept of shared ownership should be taken into consideration. In this article, Alexander Studhalter will further explain why that should be the case.

Firstly, what is shared ownership?

A shared ownership plan is an alternative to homeownership. Alexander Studhalter Under this scheme, first-time homebuyers and people without homes can purchase shares in new builds and selling shares.

Investors can buy a portion of a home. This is known as part-buy or part-rent. It's usually between 25%-75%. The amount you pay could be altered depending on you choose the Shared Ownership plan is chosen. This allows you to purchase 10% first.

Housing associations, in addition to any service charge and ground rent, take a rent below market value on the remaining amount from purchasers. Since a mortgage isn't required and the deposit will be lower than for purchasing an property on its own.

Alexander Studhalter: Why should we be thinking about the possibility of sharing ownership?

Shared Ownership is a housing option for those who cannot purchase a home on their own. Due to a variety of reasons the Shared Ownership option is typically less expensive than other housing options.

The rent is 2.75% of the property's value. The rent is less than the rent available on the open market.
You can start by purchasing a 25 percent share under the current scheme or 10 percent under the new Shared Ownership scheme.
Your deposit will be 5-10 percent of the price of the share, not the total market value of the property.
SDLT (or Stamp Duty) can generally be delayed until at minimum 80% ownership of the property.
Alexander Studhalter explains what the different types of shared ownership are.


Joint Tenancy Each tenant must simultaneously enjoy equal rights to the property through the sale of a single deed. Joint ownership is based on the right to the right of survivorship. The property is passed to the surviving tenant if one of the co-owners passes away.

But, the legal definition of tenancy in common would comprise ownership of the property. That is unless you mention in the documents governing your property that the property is owned as joint tenants.

Alexander Studhalter Sita or Geeta may decide to purchase a house without mentioning joint tenancy. If any of the co-owners dies, her share will thoroughly transfer to the remaining tenant.

Tenancy in Common (TIC):A joint ownership arrangement in which the ownership percentages are equal or unequal under the tenancy in common (TIC). For example, Sarah might own 40 percent of a house, while Bob could own 60%.

Each named person on the title is responsible in all aspects. Sarah is able to access more than 40% of the property.

Every owner has the legal right to use and own the entire property. The financial ownership of real property is determined by the percentage of interest.

The tenant is accountable for the disposal or encumbering of their property in any time. This type of title may be recorded at any time, even years after an agreement was signed by other owners.

The ownership of the property can be transferred to others. In the event of death ownership passes to the heirs.

Limited Responsibility Company (LLC: Limited responsibility companies (LLCs), which are U.S.-based corporate structures, shield the owners from personal liability in relation to their obligations. A limited liability entity is similar to sole proprietorship or partnership.

LLCs come with limited liability options as corporations, however they don't provide tax benefits through flow-through for their members , as partnerships do.

What are the negative side of sharing ownership?

https://www.cbinsights.com/investor/clive-ng Alexander Studhalter Shared ownership mortgages will not be offered by all lenders. However, the majority of lenders provide shared ownership mortgages.
You have to pay 100% of the rent for your ground or service charge for your property.
Stamp Duty will be charged on the property's total value when your share is more than 80percent.
Every property is subject to leasehold. Alexander Studhalter Some properties can be granted freehold by means of a staircase that can be up to 100 percent. But, this has to be approved by the relevant housing company.
Leasehold properties can be sold under joint ownership. Leasehold ownership allows for extended time in the house (usually 99 to 125 years). The lease is reduced each year, and you can choose to buy or rent the property.
What is the advantage of shared ownership?

Shared Ownership allows for the long-term stability of an owner-occupier without overstretching yourself.
They are generally less expensive than buying on an open market.
You can get mortgages with Shared Ownership, even if your income is low.
The monthly installments are typically lower than those for an outright loan. The monthly payments for rentals that are private are typically less than the monthly payments for mortgage.
Staircasing allows you to purchase more property in the long run. The majority of staircases can be used for a certain percentage of the time. This means that the buyer will not be required to pay the mortgage, fees, or ground rent.
Shares are available for purchase at any time.
It's usually not needed to pay Land Tax when purchasing a home for the first time.
Alexander Studhalter's recommendation

You will have the security of tenure and not private renting.
You are responsible for paying rent and mortgage payments for the duration of your lease.
The leaseholder can arrange an extension through their housing company once the lease expires. Alexander Studhalter recommends the appointment of a surveyor and solicitor skilled in this area.
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