In recent years, high inflation in the UK and the subsequent cost of living crisis has pushed the price of renting higher and higher. Affordable housing has become harder to find, and many people across the country are struggling to find the right property for themselves and their loved ones. However, private renting is not always the best or even the cheapest option available. So, is it better to rent or get a Shared Ownership property?
While both private renting and Shared Ownership have their own pros and cons, Shared Ownership has the added bonus of offering a secure future living situation. Whether renting or Shared Ownership is better for you will ultimately depend on a number of factors.
Keep reading to find out more about some of the advantages and disadvantages of private renting and Shared Ownership.
How Does Shared Ownership Compare to Private Renting?
Shared Ownership is a government-backed scheme that provides many first-time buyers the opportunity to get their start on the property ladder with an affordable housing solution. By only paying for a portion of a home, the upfront costs are far lower, but how does this option compare to private renting?
Renting Advantages
Below are some of the advantages that are commonly associated with renting using a private landlord:
- Flexibility – Unlike Shared Ownership, you are not buying your property for private renting, and your living situation is typically formalised by a short-term lease. This means that if you want to move house, it is a fairly straightforward process.
- Repairs – As you are not the owner of the property for renting, you have no need to worry about making any of the necessary repairs yourself. Your landlord should take care of these maintenance tasks.
Renting Disadvantages
There are, however, a number of disadvantages to private renting, including:
- Temporary – One of the main issues that people have with private renting is that the money you pay in rent does not contribute to any future goal. The exception to this is if you select a house that is available on the ‘Rent to Buy’ scheme.
- Home Improvements – When renting, there is a very limited amount of changes that you can make to the property without approval from the landlord. As you do not own the property, you are restricted in the amount of decorating or refurnishing you can undertake
- Initial Deposit – Before you can secure a rental property, you will typically need to pay a sizable deposit.
What Are the Pros and Cons of Shared Ownership?
While renting is often considered cheaper than buying a home, this is not always the case. With rent prices driven higher and higher, many people are looking for other, more affordable options, including Shared Ownership.
Shared Ownership Advantages
As an affordable alternative to private renting, Shared Ownership has a number of benefits, such as:
- Upfront Cost – As mentioned above, purchasing a home via the Shared Ownership scheme offers the chance for people to purchase a portion of a home for which their mortgage will cover, and to then pay rent on the remaining share. This is a far more affordable option than purchasing a home outright, and can – in some areas – actually be cheaper than renting!
- Stability – If you have found a property and a location that you are happy with, purchasing via Shared Ownership will secure your future in the area.
- Staircasing – Although you might initially only purchase a portion of a house, with time you can save money to purchase extra shares. Paying the amount you are able to each time, the process of ‘staircasing’ can be repeated up to 100% ownership.
- Home Improvements – Unlike renting, with Shared Ownership you can design and decorate the interior of your home as you see fit. While bigger changes will need to be approved by your housing provider, you will generally have far more freedom than if you were renting.
Shared Ownership Considerations
Before applying for a Shared Ownership property, there are a few things to be aware of. For example:
- Ownership – Until you own 100% of your Shared Ownership property, the property will be leasehold. In most cases once you staircase to 100% ownership, the Freehold is transferred, but you will need to check your lease. e.
- Other Costs – While you can get a rough estimate of how much your mortgage repayments and monthly rent will be for a Shared Ownership property using our affordability calculator, there are a number of other monthly payments to factor in such as a service charge which is paid to ensure your property and/or the wider estate is maintained.
Which Option Is Better for Me?
The best housing option will be entirely dependent on your current financial situation and what you are looking for. For example, if you are still looking for the right area and are unsure of how long you will want to spend in a home, private renting may be the preferable option. However, if you are looking for an affordable way to get your foot on the property ladder and secure your future in an area you love, Shared Ownership could be the ideal solution.
You can quickly check what Shared ownership property you can afford by using our free online affordability calculator.
Customer Success Stories
At Plumlife, we are exceedingly proud of our customers who have managed to staircase to 100% ownership of their Shared Ownership property. Below are just a couple of success stories:
- Matt and Jake – After purchasing an initial share of 43% for their home in Stockport in 2015, Matt and Jake were able to staircase to 100% ownership after seven years living at their home.
- Dania – Initially purchasing a 50% share in her home in Manchester back in 2021, Dania managed to reach full ownership in under three years.
Contact Plumlife Homes Today
At Plumlife, we are proud to offer a range of stunning properties available for both Shared Ownership and renting. If you are unsure what your perfect home will be, contact a member of our team to be pointed in the right direction.
