When your dream is to purchase a property, to be a homeowner, you may have a specific vision in mind. But it is important to recognise that there are many different ways to be an owner. There are benefits and drawbacks to consider of course, but there are also different avenues open that will allow you to meet your goals on your terms. In this article, we will take a look at different types of house owners in the UK so you can choose a path that works for you.
5 Paths to Property Ownership
As with most anything in life, there is more than one way to accomplish your goals. When it comes to owning property, take the time to investigate your options. These include:
- Sole Proprietor
This is typically the most streamlined and simple option in terms of property ownership. All sole proprietor means is that one person is the sole buyer and that person then owns the home solely and completely. This is perhaps what your dream encompassed, as it is very common. That doesn’t mean it’s the only option, but it is one that is relatively uncomplicated.
Now, you could also enter into a situation where you have a ‘joint borrower sole proprietor’ mortgage. This is when a second party acts as a participant on the mortgage but is not on the title deeds of the property. For example, a young adult may not have adequate credit for a mortgage on their own. A parent may essentially ‘co-sign’ the mortgage, which reduces the risk as far as the lender is concerned.
- Joint Tenants
What if you are married or in a partnership? In this case, you may want a joint tenant situation, which is the most common method of home ownership in the UK. Here, both parties are named on the mortgage and the property is held as joint tenants, meaning both registered owners own the property in its entirety together. There are no separate shares; that is, one party does not own 65% while the other owns 35%. It is all 50%-50% in the eyes of the law.
- Shared Ownership
Think of shared ownership as a hybrid of buying and renting. Here, buyers have the chance to purchase between 25% to 75% of a property. For the remaining portion, they pay rent. This is a scheme designed to help those who are not able to buy a home in the traditional manner because they cannot afford the deposit. It also gives these buyers an opportunity to get on the property ladder at a much lower cost.
- Tenants in Common
With this method, people can buy a property with a co-owner. Each party will own a specific share. Oftentimes, it is 50% each, but unlike joint tenants, you can hold unequal shares. Why would this be advantageous? For many reasons. One being that if you want to own a property with another person but also want to leave your share to a child, for example, when you pass. Another reason: you may have more or less funding to purchase while the co-owner can make up the difference in a suitable way. This can be reflected in your ownership shares.
- Help to Buy
This is a government scheme designed for people who are finding it exceedingly challenging to save for a deposit on their first home or who are struggling to move up the property ladder because of limited equity. The Help to Buy programme allows them to put down a 5% deposit, with the government picking up an additional 20%. This means people can access a mortgage at a maximum rate of 75%. Home ownership can be a lot more accessible in this way.
Thinking of Selling?
Just as there are different types of house owner in the UK, there are different ways to sell your house and move on to the next steps in your life. If you want to sell in order to purchase a new house, time is often of the essence. Escaping the chain can be all but impossible – unless you break your link altogether. With a cash house buyer, you can sell your house in as quickly as a few weeks and walk away with the funds you need to cover your deposit.
And just as there is more than one way to purchase a home, there is more than one way to sell too. Explore all of your options. You can achieve your goals with a bit of research, preparation and guidance.