Shared Ownership (Part Buy Part Rent)
What is Shared Ownership?
Shared ownership is an affordable home ownership scheme which involves part owning, part renting a property. It is designed for people who can’t afford to buy a home outright on the open market. It is available through housing associations and new build and existing shared ownership properties, known as resales, are available through shared ownership. It is the most established affordable home ownership scheme, and is available throughout England.
The most established affordable housing scheme is shared ownership, whereby you part buy part rent property from a housing association. The scheme is sometimes referred to as ‘part own part rent’ because you literally own part of the property and pay a rent on the remainder that is subsidised so as to be affordable.
How does Shared Ownership work?
· Buy a share in a property, usually ranging from 25% to 75%
· Pay below-market rent on the remaining share owned by a housing association
Although your maximum share can sometimes be capped, with most shared ownership homes you can 'staircase' to full ownership in the future (i.e. buy more shares in the property up to 100% ownership). There is more information about staircasing here.
The rent you pay can be up to 3% of the association's share of the property value. Shared ownership properties are leasehold properties, meaning you will own the lease on them for a fixed period of time, typically 99 years.
You also have to pay a service charge for the property, which is usually charged on a monthly basis.
What properties are available for part rent part buy schemes?
You cannot purchase any property on the open market. Shared ownership housing is generally restricted to properties owned by a housing associations.
Most part buy part rent properties are new build and the only national scheme for part owned houses on the second hand market is where an existing owner sells their share on to a new owner in a process known as a resale.
You can search for housing association shared ownership properties, including part buy part rent flats and houses, using our shared ownership property search tool.
Selling your shared ownership home
You can sell your shared ownership property at any time but the housing association has the right to find a buyer for your home, if it still owns a share of it and to buy it back first.
Shared Ownership mortgages
The mortgage team at Share to Buy ltd has significant experience in arranging mortgages for shared ownership schemes, and has access to the main part buy part rent mortgage lenders. Find out what you can borrow and the potential cost of a shared ownership mortgage using our shared ownership mortgage calculator tool which enables you to search for shared ownership mortgages from across the market.
Rent to buy
Rent to buy properties make another important affordable housing option. With the rent to buy scheme you can rent a property at a below-market rate, enabling you to save towards a deposit so that you can eventually purchase that property. Thus, rent to buy schemes offer a way to part own houses and flats after a period of initially renting them – hence, rent to buy housing is sometimes called ‘try before you buy’. You can find both rent to buy flats and rent to buy houses on the Share to Buy property website.
23rd May 2016
“There was no way I would have been able to afford a home without buying through the Shared Ownership scheme. Being in my early 20s, buying outright on my own would have been impossible and I found I was being priced out of London, even in places I could commute from. The scheme was the most reasonable and realistic option for me to get onto the housing ladder with the money I had available, and this meant that I was able to purchase a 50% share of my home.”
18th May 2016
One of the questions most often asked is ‘How much can I borrow for a mortgage?’ Our latest blog introduces the new Share to Buy Mortgage Affordability Calculator, a new tool to give you an indication of what is affordable for you to borrow.
28th April 2016
Our latest blog is a quick look at Shared Ownership - who it it for and how does it help?
19th April 2016
Our lastest Guest Blog comes from StrideUp and looks at the areas in London in which the prices are rising fastest.
"We all know house prices in London are high. There are many aspects to think about if you're aspiring to be a homeowner, not least of which is deciding where to buy. Obviously this is a decision largely based on personal circumstances, but if you want to make the most of your money, it doesn't hurt to also think about where property prices are rising."