The introduction of a new calculator will help people thinking of shared ownership to calculate the cost of buying a percentage share of a property over the whole term of the mortgage, rather than just the initial year.
The tool has been created by a technologist from Goldman Sachs and is free for anyone to use. In addition to calculating the total costs of shared ownership, it also lets a person work out the cost of buying more shares in the future, known as stair casing.
Shared ownership has been possible since the 1980s, although restrictions occasionally made it difficult for buyers. As the government aims to turn ‘generation rent’ into ‘generation buy’, the restrictions have been eased.
It is now possible for anyone to apply for shared ownership, no matter what occupation they have. The income caps have also been amended to £80,000 for the majority of the UK, with the cap standing at £90,000 in London.
Experts believe that shared ownership may be used by those who are struggling to buy a home outright due to rising property prices and stricter affordability rules. However, it has previously been difficult to calculate how future changes in income and costs will affect the cost of shared ownership, which the calculator will help with.
Although shared ownership may be a welcome option for those who are struggling to get on the property ladder, the advice of a CeMAP trained mortgage adviser should still be sought to ensure it is the best option.
