Notes

Alexander Studhalter discusses why people are interested in shared ownership

Shared ownership permits first-time buyers to buy a piece of the real property. Alexander Studhalter, a businessman believes that sharing ownership can be an alternative. Alexander Studhalter will provide further explanations of why this should be so.

First, what exactly is shared ownership?

The alternative to homeownership is shared ownership. Shared ownership is an alternative to homeownership. People who are first-time buyers or with no residences can purchase shares in new homes or resales.

An investor can purchase a part of a home. Part-buy is also known as part-rent. The amount is usually between 25 and 75%. If you decide to purchase 10% shares under the Shared ownership model, you may increase the amount.

A below-market rent is collected from the buyers by housing associations. Alexander Studhalter This is inclusive of the cost of service or ground rent. A mortgage isn't required to purchase a property. Therefore, the deposit is usually lower than the value of a property.

Alexander Studhalter wonders why people are thinking about shared ownership.

If you are unable to afford to purchase a house the share ownership option is an option. Alexander Studhalter The costs associated with Shared Ownership typically are lower than other housing options due to a variety of reasons.

Alexander Studhalter At 2.75 percent of the value of the property, the rent is much less than that which is available on the market.
You can start by purchasing a 25 percent share under the current scheme or 10 percent under the Shared Ownership scheme.
Your deposit will be 5-10 percent of the price of the share and not the market value of the property.
SDLT (or "stamp duty") is typically delayed until that 80% of the property is held by you.
Alexander Studhalter explains differences between shares of ownership


Joint Tenancy All tenants have to simultaneously share an equal stake in the property in one sale deed. The concept of joint ownership rests on the principle of survivorship. After the death of one co-owner, the property is transferred to the tenant who is the survivor.

However, ownership of the property could legally be classified as tenancy in common. This is, unless you indicate in the documents governing your property that the property is owned by joint tenants.

Sita and Geeta may have bought the same house. In this instance they specifically mentioned the joint tenant. If one of the co-owners pass away, the remaining tenant is entitled to her portion.

Tenancy in Common (TIC):A joint ownership arrangement that allows the ownership percentages are equal or unequal under the tenancy in common (TIC). Alexander Studhalter Sarah may own 40% of the property and Bob could own 60%.

Each named party on the title owns all rights to the property. Sarah has access to 40% of the property, however she cannot access 40%..

Each owner is entitled to full access to the property. The interest rate determines the financial ownership of the real estate.

It is the tenant's responsibility to dispose of or encumber their property at any time. This type of title could be entered at any moment, even years after an agreement was signed by owners who were not the tenant.

You may transfer ownership to someone else; in case of the owner's death, ownership will transfer to the owner's heirs unrestricted.

Limited Liability Corporation (LLC) Limited liability corporations (LLCs) are U.S. business structures that shield the owners from personal liability for any debts. A limited liability company has similar characteristics to partnerships or sole proprietorship.

Although LLCs have limited liability options like corporations, they aren't able to offer tax flow-through for members, like partnerships.

What are the negatives of sharing ownership?

The lenders do not offer the shared ownership type of mortgage. The majority, however, will.
You are required to pay 100 percent of your ground rental or service charge of your property.
Stamp Duty will be charged on the entire property value when your share is more than the 80% mark.
All properties are leasehold only. Some homes will be leasehold, but others can be made freehold by taking the staircase to 100 percent. This must be done via an agreement with the relevant housing service.
Leasehold properties can be transferred to the shared ownership model. Leasehold ownership gives you the possibility of living in the house for a longer period (usually 99 years or more than 125). The lease term is reduced every year, and you may either buy or sell the house.
Alexander Studhalter What are the benefits of shared ownership?

Shared Ownership allows for the long-term stability of an owner-occupier and without overstretching your self.
The cost of deposits is usually less than buying from an open market.
Even if your income is low, Shared Ownership makes it easier to get mortgages.
The monthly installments are typically lower than those if you have an outright mortgage. In comparison to private rental properties their monthly installments tend to be lower.
Staircasing lets you buy additional shares of your house later on. Most staircases are 100%-useable The buyer is responsible for their mortgage, service charges, as well as ground rent.
Shares are always available for purchase.
It is seldom needed to pay stamp duty land tax to purchase land for the first time.
Alexander Studhalter's recommendations

You are guaranteed certainty and security of tenure that isn't possible with private renting
Mortgage and rent payments have to be paid for the term of the lease. The typical lease term is 99 to 125 years.
At the end of the lease, the leaseholder can organize an extension with the housing company. Alexander Studhalter suggests that you appoint a solicitor or surveyor who is experienced in this area.

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