Examples

Miss E and Mr J from Bridport both work full time. Between them they have a household income of £26,000 a year.

They can afford a mortgage of around £80,000.

The price to buy a 2 bedroom house in Bridport is £160,000. The average rent is £650*.

Charter has a 2 bedroom house for sale through shared ownership in Bridport, which the couple can buy a 40% share of.

The open market value is £160,000 so they would need a mortgage for £64,000 (40% of £160,000). Their monthly cost for this would be:

Mortgage repayment £428.50*

Rent to Magna Housing Association on 60% £160.00

Total cost £588.50

 

Mrs K currently lives in a rented house with her two daughters. She has a part time job from which she earns £8,000 a year. Due to the sale of a joint home she has a divorce settlement of £75,000.

 

Mrs K would like a 3 bedroom property in Watchet near to her daughters' school. The price of a 3 bedroom property in Watchet is £185,000. The average rent is £744*.

Mrs K can use the money from the settlement to buy a 40% share in a Charter home with an open market value of £185,000. This would be £74,000. She would not need a mortgage and would therefore only be paying rent. Her monthly cost would be:

Rent to Magna West Somerset Housing Assocation on 60% £185.00

Total cost £185.00

*Average rents March 2011 - source: nestoria. Mortgage repayments based on 6.6% repayment mortgage. This is indicative for comparison only.