Step 3. Understand the monthly costs

Monthly Costs for Shared Ownership Homeowners: Rent and Service Fees

Managing Monthly Costs for Shared Ownership Homeowners

Once you own a home, you may need to pay additional charges beyond the mortgage. These charges can include:

Rent Payments for Shared Ownership Homes

Shared ownership properties are sold on a leasehold basis. As the owner of a share in the property, you must pay rent to the landlord for the share that you do not own. The landlord usually reviews the rent each year, which may result in an increase.

  • ✅ If you buy more shares, you will pay less rent.
  • ⚠️ If you purchase a new-build home, the starting rent limit is 3% of the value of the share that the landlord owns. Typically, it starts from 2.75%.
  • ⚠️ For resale homes, the starting rent will be set at the same level as the previous owner was paying.
  • ⚠️ Keep in mind that your rent may go up when it is reviewed, and it will not go down.

Understanding Service Fees and Their Coverage

Typically, you will need to pay a service charge to the housing association for the services they provide. This charge covers the cost of cleaning, building insurance, and maintenance of communal areas.

  • ⚠️ Ask the landlord for a summary showing how the charge is calculated.
  • ⚠️ Be aware that the charge may vary from year to year without any limit.

Possible Additional Fees for Some Shared Ownership Homes

For some homes, there may be additional charges that are not covered in the service charge, such as:

Key Considerations for Financial Stability

It's important to note that failure to pay rent or breaking the terms of your lease can result in losing both your home and the money you have invested in it.

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Finding and Buying Shared Ownership Homes: Search Tools and Legal Process