Shared Ownership homes: New Build Vs Resales

Shared Ownership is an affordable home-buying scheme aimed to help those who can't afford to buy on the open market get onto the property ladder. It works by buying a share (usually 25%) of the home and paying rent on the remaining amount you don't own. This means you can buy with a much smaller deposit than what you would need by buying on the open market. 

Shared Ownership is available on both new-build developments and second-hand 'resale' homes, but which is right for you? We delve into the benefits of both options, but first let's clarify what a new build and resale home is:

What is a New Build home?

New build Shared Ownership homes are purpose-built properties, usually part of a larger development built by a Housing Association (usually in partnership with a developer). If you buy a new-build home, you will be the first person to live there.

What is a Resale home?

Resale properties are homes that a current owner bought through the Shared Ownership scheme and wishes to sell on. This means you will not be the first person to live in that home. 

Cost of buying a New Build home

Like all Shared Ownership homes you buy an initial share (usually 25%) of the home and pay rent on the percentage you don't own to the housing provider. This means you can usually buy with a much smaller deposit than compared to buying on the open market as you only need a mortgage on the share purchased. The rent on the percentage you don't own is usually subsidised and lower than the market rate. 

The value of the home is based on current market valuations and unlike on the open market, you cannot make offers on the home below the value advertised. 

New build homes often benefit from new home features and mod cons such as integrated appliances and latest energy efficiency features which means there may be a slight new build premium on new homes compared to pre-owned homes but could save you on energy costs in the long run!

New build homes also benefit from a warranty to which can save you money if anything goes wrong in your home for the first two years.

Cost of buying a Resale Shared Ownership home

When buying a resale Shared Ownership home, you have to buy at least the percentage owned by the current home owner. For example, if the current home owner has staircased and now owns a 40% share, then you would need to buy a minimum 40% too which can increase the initial deposit amount required.

However, you may benefit from slightly lower house values compared to new build homes as well as resale homes that may have a lower lease length in some circumstances. 

You do also need to factor in whether there are any additional costs associated with decorating or upkeeping an older property if you want to change the decor or need to invest in newer appliances for example.

New build specification

Like most new-build homes, they often include modern fixtures and fittings including high-specification appliances such as integrated dishwashers and washer dryers. They will also usually benefit from new building regulations helping to ensure your home is energy efficient which reduces your running costs in the future. This is great for first-time buyers who may not have the funds initially to buy new appliances.

New-build homes will also provide a 'blank canvas' with clean white walls and interior meaning you can start styling your home to suit your personal taste, whether that's scandinavian-inspired design or a more art deco vibe. 

Resale Shared Ownership home features

With resale Shared Ownership homes, you may find that there is a sense of character given it is an older property and potential to find period features within the home which you may be drawn to compared to a new-build home. 

As the home is pre-owned, it is likely that the current home-owner has already decorated the home to their taste. Great if your styles match or you wasn't sure what to do with the space. Don't worry if it isn't though as unlike with a rental property, you are freely able to redecorate the interior how you want as an owner-occupier under Shared Ownership terms.

Older properties will generally have a sense of character about them. Whether you like the period features of an older property, or you may appreciate some of the previous owner’s handiwork around the home, they’re visually quite different from a new build.

A buyer of a resale home will still be able to decorate and style their home according to their taste, however this often isn’t quite as easy with an existing property as the home will have previously being altered and fitted out to suit the tastes of the previous occupants; consequently, it may prove trickier to start afresh without doing some more work first.