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What does shared equity mean when buying a house?

Asked on Feb 4 2010, Home Finance in Ardrossan | Report content

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  • In a nut shell, you buy the house in your name but the builder or government has a (and I use this figure as an example but it isnt fixed) .. 25% share. So the house is in your name but yoiu own 75% and the government or builder own the other. They will either want the othe rpart paying to them in the future or when you sell, they get 25% of the sale proceeds. It is a little complicated .. check the wiki page out. I must strees I havent given any advice on this and you must check with solicitors etc before commititng to any mortgage under the scheme (I had to say that incase someone sued me) ;-)

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    Answered on Feb 7 2010, Report content
  • Hey Karen! I know this question is super old, but I always want to help people looking for information on property - hopefully this can help others that search for the topic. More information is never a bad thing, right?! What does a house with equity share mean? So this is where a house is for sale and often you will see these on Zoopla for example and they’ll look surprisingly cheap and then when you read a little more closely you’ll see that they’re equity share. Now what this means is that you have a private individual, a company, a housing association, a council who own a property and their selling a proportion of it. There not renting to you as such, but what they’re doing is saying perhaps because of the market or mortgage availability there aren't many people able to buy a property at full market value so they’ll say that they’ll for example sell you 60% of it for a certain price, obviously much reduced from the normal purchase price and then you either pay a small rent to the company or council or whoever it is, or you just retain the property with no rent but when you come to sell it you can only sell 60% of that property for example. Now this is really good system, it certainly helps a lot of people to actually get their own home if that haven’t quite got enough money to purchase outright, of course there are a lot of people like that. The difficulty can be that you really only ever own a proportion of it, so when you come to sell your share you’ll only be able to sell that to somebody who’s looking to do a equity share, so there is a slightly restricted market, so do bare that in mind. If it’s your only route into buying property then I think that it’s a good thing to explore but as ever take good legal advice from your solicitor. Hope that can anyone looking for advice on the subject! Jonathan Rolande :-)

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    Answered on Sep 15 2015, Report content

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