Through 2019/20, it was estimated that there were 827,000 first-time buyers in England. This number had increased from 100,000 during the previous year, while the average age of first-time buyers also fell slightly from 33 to 32.
If you are thinking of buying a home, however, you’ll need to know that this is a complex process and one that involves a number of different home ownership models.
We’ll explore some of these home ownership models below, while asking how these work and whether or not they’re right for you.
#1. Sole Home Ownership
We’ll start with the single most common and popular type of home ownership, through which there’s one owner and the property is purchased through a traditional mortgage product.
Sole proprietorship is also the simplest iteration of buying and owning a home, while this vehicle can also include a joint application or borrower.
The benefit of this is that a second party, such as a parent, can actively help their child to purchase their property through a joint mortgage.
However, such entities won’t feature on the property’s title deeds, ensuring the house remains in sole ownership despite the structure of the application or funding.
#2. Shared Home Ownership
This leads us neatly onto shared home ownership, which blurs the lines between buying and renting property and makes it much easier for some first-time buyers to take their first steps on the ladder.
Through this model, buyers are empowered to purchase between a quarter and three-quarters of a property, while they’ll be required to pay rent to cover the remaining share of the asset.
The scheme is directly focused on younger first-time buyers who may not be able to afford a property outright, with this number growing as the average house cost in the UK continues to rise at a disproportionate rate to earnings.
#3. Joint Tenancy
This is the most common form of co-ownership, particularly among married people or those in civil partnerships who are buying property for the first time.
A joint tenancy can be pursued through a traditional mortgage application. In this instance, the property is owned jointly by each tenant, who will be registered proprietors and effectively share the whole of the house together.
This negates the need to split the home ownership into different or equal shares, creating a scenario where each application owns 100% of the property.
#4. Buy-to-Let Mortgages
While the buy-to-let market may not be as buoyant as it once was (largely due to the gradual eradication of tax and stamp duty breaks for owners), this continues to offer value in an age where the demand for rental homes remains high.
With a buy-to-let market, proprietors will identify in-demand properties and purchase them with a view to letting them out on a rental basis.
The key here will be to generate an incremental profit over time, whether the property is refurbished after being purchased for a discounted price or not.
Once the property is ready for the rental market, owners will liaise with an estate agent to secure tenants, while potentially helping to set a viable price point and manage recurring maintenance tasks.
Related: End-users Vs. Investors – Who Are The Smarter Buyers?
1 Comment