What Does Shared Ownership Mean in the Property Market?

Shared ownership or fractional ownership is a method of getting into the housing market by purchasing part of a house outright, and paying rent on the part which is not owned.

Shares

Shared ownership is a prescriptive term; fractional ownership is a descriptive term. The pieces of property are called shares, so one might buy a 25 percent, 50 percent, or 75 percent share in the property, paying rent on the remaining share.

Part Buy, Part Rent

The larger the share you buy on your house, the less rent you will pay for the remaining share. The amount of rent paid follows the size of the share being rented.

Staircasing

Buying more and more shares until you outright own your home is called staircasing. This will result in less and less, rent leading up to the point where you own the property in its entirety.

Alternative

In the recent economic downturn, very few areas of the public sector have been affected as strongly as the real estate market. Shared ownership offers a realistic and sensible way for families to buy a home within their means.

Timesharing

Shared ownership is not the same as timesharing. Timesharing is where multiple parties pay for a set amount of time to use a property, rotating who amongst the owners uses it. Under shared ownership, the person with the deed is the sole owner, but does not own the property in its entirety.

References

• Shared Ownership.org
• Property Abroad.com: Fractionl Ownership

Resources

• Go Direct.uk: Shared Ownership Mortgage