Shared Ownership: the costs

When thinking about buying a Shared Ownership home, it is important to be aware of the costs involved in the purchase of the property and the monthly costs you will expected to pay once you have moved into your new home.

Buying a Shared Ownership home


When buying a Shared Ownership home you will need to put down a deposit. This is the amount you pay toward the cost of your share you are buying at the time of purchase. The amount required for a deposit will vary from property to property, but the typical Shared Ownership deposit is 5% or 10% of the share you are purchasing.

For example, if you buying a 25% share of a property with a full value of £300,000, the value of your share will be £75,000. If a 5% deposit was required, you would need to put down a deposit of £3,750.

Solicitor Fees

Your will need a solicitor or licensed conveyance professional to carry out the necessary legal work.  You will need to have instructed a solicitor before your mortgage application can be submitted and it is important to check with your solicitor that they are approved to work for your mortgage lender.  Solicitor’s fees are usually be on a fixed cost basis and all the solicitors on our mortgage panel will be happy to give you a quote.

Stamp Duty

When purchasing a Shared Ownership property as a first time buyer you will have the option of paying stamp duty on the full value of the property as if you were buying outright. The advantage being that you will never have to pay stamp duty again even if you buy the property outright later at a higher price. The disadvantage being the initial cost.

Alternatively you can choose to only pay any stamp duty on the share that you are purchasing, which may well be less than the allowance for first time buyer.  There may also be a stamp duty charge based on the rent payable over the term of the lease (lease premium) called the “net present value”. The advantage being to reduce the costs incurred at the time of purchase, the dis-advantage being that the overall cost may be higher when you purchase 80% or more of the property.

If you have already purchased your property and did not elect to pay the full stamp duty at outset, then you will not be liable until for stamp duty when purchasing further shares, until you share is 80% or more.

The calculation of the stamp duty payable can be complicated and you should seek the advice of your solicitor or other legal adviser for the amount you may be liable to pay early in the process and what may be best in your circumstances.

Mortgage Broker Fees

Most mortgage brokers will charge a fee for their services and these can vary from a fixed amount to a percentage of the purchase price.  A mortgage broker should explain clearly what fees are charged and when, before they undertake any work on your behalf.

Other moving costs

Other costs may be incurred, such as removal costs but these can vary widely. Housing Associations recommend that you have between £3,000 and £5,000 in hand to cover all the fees and costs of moving, which includes the solicitors and broker fees.


Monthly costs of a Shared Ownership home


Each month you will make repayments on your mortgage, until the time the mortgage has been repaid. The amount you will pay towards your mortgage will be dependent on the value of the share you purchase, the deposit you put down, how long of your mortgage term is remaining and the interest rate.


The exact figures for the rent are sent to you with the viewing details. It is usually set around 3% of the unsold equity.

For example: if you wanted to buy a 50% share in a property worth £200,000 the equity you would pay rent on is £100,000. If you divide the unsold equity by 100 and multiply by 3 you will get the total rent payable per annum. Just divide this by 12 to get the monthly rent payable.

The amount of rent will vary for each home depending on:

  • The share you buy
  • The value of your property when you buy it

Service Charge

Service charges are payments by the homeowner to the housing association for the services they provide. These include maintenance and repairs to common parts, insurance of the building and, in some cases, provision of lifts, lighting, communal aerials, door entry systems, cleaning of common areas and grounds maintenance, etc. Usually the charges will also include the costs of management.

Service charges can vary from year to year; they can go up or down without any limit other than that they are reasonable. Details of what can and can’t be charged by the landlord and the proportion of the charge to be paid by the individual homeowner will all be set out in your lease.


Buildings insurance is be the responsibility of the Freeholder – quite often the housing association.  The cost will often be included in the service charge.  Contents insurance, which covers all your furniture, carpets, white goods and personal belongings, is the responsibility of the person living in the property – it is not compulsory to purchase but it is advisable.