TWO friends in their 20s managed to buy a home in London with a cinema – here’s how.
Danielle Whiteman, 27, and Joe Mascar, 23, teamed up to jump onto the property ladder after meeting at work.
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They’d only known each other for nine months but realised they wouldn’t be able to get to own a house by themselves.
Danielle wanted to stay in London to be near her friends and family, but says on a single income, she couldn’t meet the financial requirements for the properties that were available.
Joe had viewed some options on the open market that were affordable but “horrible”.
They realised they were stronger together and could put their combined savings of £40,000 together for a deposit to reach their goal of owning a home.
Joe told MyLondon: “Danielle and I were both fed up with feeling priced out of London, the city where we had both grown up, so we were thrilled when we learnt that we could get onto the property ladder with a combined deposit through a scheme designed for first-time buyers.”
They were able to purchase 35 percent of a flat at The Silk District worth £567,000 in London’s Whitechapel.
When buying a home through the shared ownership scheme, you buy a share between 10 percent and 75 percent of the home’s full market value and pay rent to the landlord for the share they own.
In Danielle and Joe’s case, they pay a mortgage calculated from the 35 percent they own and pay rent simultaneously.
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They split the £500 a month mortgage plus £657 in rent as well as a service fee for the building, bringing their total shared outgoings to £1,467.
A shared ownership mortgage can provide a more affordable way of getting on the property ladder.
You typically need a lower mortgage of between 5% and 10% so the upfront costs are reduced.
One of the issues with shared ownership is that you don’t have as much freedom when it comes to selling your home, compared to if you hadn’t used the scheme.
If you own less than 100 percent, your housing association will get a set period of time to find a buyer, meaning you won’t be able to accept a higher offer from someone else.
Many shared ownership leases also contain a clause that gives the housing association dibs on buying it back before offering it on the market.
There are also fewer lenders offering shared ownership mortgages compared with standard ones. This means there isn’t much competition to offer decent rates.
Another issue is that shared ownership mortgages are usually leasehold. There will be service charges to pay and there could be restrictions on renovations or having pets.
