I’m composing a page about Shared House Ownership – where you own a fraction of the house and you pay rent to a company that owns the remaining fraction of the house. I recently helped my parents extricate themselves from such a scheme – such a poor scheme.
Without getting into details here, the attraction of the schemes is that they are often available when someone doesn’t meet the criteria for a mortgage. Those who take them up are often new to house ownership and are people with little experience of such financial schemes. It is perhaps unsurprising therefore that costs are often high, and terms are often biased in favour of the company and liable to change over time.
Looking around websites I see nothing to convince me that there are low-cost versions of shared ownership schemes from private companies. (Some housing associations and government schemes are somewhat different.) If some mortgage companies can charge competitively low monthly interest, why don’t shared ownership companies charge similarly? I suspect that the ability to switch and remortgage keeps many mortgages competitive, whereas people in shared ownership are usually stuck with their company until they move elsewhere or buy out their share from the company.