shared homeownership scheme

18 Apr Shared Homeownership Scheme: What It Means For First Home Buyers

Posted at 05:06h in News from Quay Law by

You might have seen the recent announcement by BNZ about their new shared homeownership scheme. So, what exactly is it and what does it mean for people who are keen to take their first step onto the property ladder? As an Auckland lawfirm specialising in property law and conveyancing, here’s our take:

BNZ Shared Homeownership Scheme – The Details

The BNZ shared home ownership scheme is not dissimilar to homebuying schemes which have been run in the UK and Ireland with success for a number of years.

In summary, a first-time buyer teams up with an equity investor to co-purchase a house. The buyer invests what they can afford, with the co-investor (in this case YouOwn) investing the remainder to bring the total equity to 20%.

The buyer then services the loan on their share of the property, as well as paying an “interest” charge to their co-investor, with the eventual aim to buy them out and own 100% of the house.

Shared Homes Scheme – The Benefits

  • It allows you to get a foothold on the property ladder – you put up a deposit that you can afford (minimum 5%).
  • You can start to increase the % ownership you have in the property after 5 years, with no set timeframe to achieve full ownership of the house.

Shared Ownership – Things to Consider

  • This scheme is aimed at buyers with a household income of minimum $120,000 given the price of the eligible homes.
  • It only applies to certain Auckland new-build homes at the present time.
  • As well as your mortgage repayments you pay a separate charge on the equity investment by YouOwn.
  • You’re responsible for all ownership costs such as insurance, rates and maintenance of the house.
  • You won’t be able to sell your house without agreement from the equity co-investor, although you may be able to rent it out if your circumstances change.

As Auckland lawyers, we consider the BNZ co-ownership scheme to be an interesting new way to get on the housing ladder for first-time buyers. However, it always pays to do your research and to consider all legal aspects to ensure that it’s the right choice for you.

Here at Quay Law, as property lawyers and conveyancers we’d be happy to help you discover if the shared homeownership scheme is right for your circumstances. If you’re looking for a lawfirm in Auckland to help with selling, purchasing or financing a home, get in touch with Quay Law today.

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