When house prices are high, shared equity is one way people on low-to-moderate incomes can still enter home ownership. The Centre has targeted the need for a viable shared equity model as a priority. A viable shared equity model of home purchase will provide an opportunity for low-to-moderate income earners to become homeowners.
Shared equity schemes aim to facilitate home purchase by people who cannot afford the mortgage repayments on 100% of a home’s purchase price, but whose incomes would allow them to pay a proportion of the mortgage. The remaining proportion would be paid for and owned by another party in a shared equity arrangement. The other parties might be a financial institution.
Most shared equity schemes will allow the homebuyer to purchase greater equity from the other partner(s) over time, as their financial circumstances improve. This means that ultimately, they may become full owners.