Shared Ownership: the costs

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What are the costs of buying a Shared Ownership home?

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 the 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 home 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

You will require a solicitor or licensed conveyancer to carry out the necessary legal work. You will need to have instructed a solicitor before your mortgage application can be submitted, and it’s important to check with your solicitor that they are approved to work for your mortgage lender.  Solicitor’s fees will usually be based on a fixed cost basis.

For more information or if you’d like to get a quote, you may wish to contact the firms on our Shared Ownership Solicitors and Conveyancing Panel.


Stamp Duty

First time buyers in Shared Ownership homes will pay zero Stamp Duty on the first £300,000 of any home that costs up to £500,000.

As a first time buyer, when purchasing a Shared Ownership property you will have the option of paying Stamp Duty on the full value of the property as if you were buying outright. The disadvantage here is the initial cost, with the advantage being that you will never have to pay Stamp Duty again – even if you go on to buy the property outright later at a higher price.

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 buyers. 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 disadvantage 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 to pay more Stamp Duty until you purchase an 80% share of your home via the staircasing process.

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 to find out what may be the best option 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. For more information, you may wish to contact a specialist Shared Ownership mortgage broker.


Other moving costs

Other costs may be incurred throughout the process such as removal costs, although these can vary greatly. Housing associations recommend that you have between £3,000 and £5,000 available 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, the remaining length of your mortgage term and the interest rate.



Rent on a Shared Ownership home is usually set at around 3% of the unsold equity, however, the exact figures will be sent to you with the viewing details.

For example: if you wanted to buy a 50% share of 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 and the value of the property when you buy it.


Service Charge

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

Service charges can vary from year to year, going up or down without any limit other than that they are reasonable. However, a few leases provide a fixed service charge instead so you should always check the terms of your lease to see how your service charge will be calculated.

The amount collected at your development from all residents will be compared with how much has been spent on items such as communal cleaning, gardening and general maintenance and adjusted accordingly. At the end of every financial year, your housing association will be able to provide you with a copy of the audited accounts and clearly explain if there needs to be any changes to your service charge for the year ahead.



Buildings insurance will be the responsibility of the Freeholder – quite often this will be the housing association, however the cost will often be included in the service charge.

Contents insurance – which covers all of the furniture, carpets, white goods and personal belongings in a home – is the responsibility of the person living in the property. It is not compulsory to purchase content insurance but it is advisable.


For more information you can visit our article index or start your property search on Share to Buy today!

How do I find a Shared Ownership mortgage?

You can use the Share to Buy Mortgage Comparison tool to get an idea of the Shared Ownership mortgages available on the market. To apply for a mortgage you can then contact the lender directly, or speak with a specialist Shared Ownership mortgage broker.

We have a number of handy mortgage guides, tools and broker panels available on Share to Buy. Check out our mortgage index for more information.