Shared ownership has become a increasingly common choice for buyers aiming to get on to the housing ladder, but the process can be hard to understand, from mortgages to potential changes in rents.
Now, a new calculator has launched to work out the cost of a shared ownership property, not just for the first year, but over the full term of a mortgage.
The tool allows buyers to ‘stress test’ their borrowing against future rent and interest rate rises, or service charge changes, letting them drill down into individual years to see the full monthly impact.
It was created by Natasha Brown in her spare time, after the ex-Goldman Sachs technologist found it hard to work out the cost of her own shared ownership scheme.
“When I looked into the possibility of shared ownership myself, not only did I feel I was getting a hard sell from various housing associations but it was incredibly difficult to understand the overall cost, especially when it came to the prospect of staircasing to full ownership, which is what buying a home is all about,” she explains. “I also felt there were no tools available to help me stress test my ability to maintain payments when circumstances change in the future, which they invariably do.”
“With certain other calculators, the ‘What ifs’ and potential risks facing borrowers seemed to be an afterthought rather than something that’s integral to the purchase process.”
The tool also includes a sophisticated calculator for staircasing. The ability to ‘staircase’ to 100 per cent ownership of a property is integral to shared ownership’s appeal, but to date, relevant calculators have simply provided a Yes/No estimate of whether purchasing an additional share is affordable. This new calculator, by contrast, enables users to see the full financial cost of staircasing multiple times and at any point in a mortgage, helping them to plan a strategy to reach their full ownership goal.
Free to all, the new tool for shared ownership buyers arrives at a time when more people are eligible for shared ownership, following the raising of the income limits to £90,000 for London and £80,000 for elsewhere in the UK. With house prices continuing to climb, the option is also more likely to be considered by potential buyers when sizing up the housing ladder.
To use the calculator, visit sharedownershipcalculator.com.Google+