What is Shared Ownership?
Shared Ownership gives first time buyers and those that do not currently own a home the opportunity to purchase a share in a new build or resales property, The purchaser pays a mortgage on the share they own, and pays rent to a housing association on the remaining share. Because the purchaser only needs a mortgage for the share they are purchasing, the amount of money required for a deposit is a lot lower when compared to the amount that would be required when purchasing outright.
The purchaser has the option to increase his share during their time in the property via a process known as ‘staircasing’, and in most cases can staircase all the way to 100%, thereby owning the property outright. Shared Ownership properties are always leasehold.
Read on for more information about Shared Ownership, or start your Property Search.
Why buy a Shared Ownership home?
Shared Ownership is essentially for people who would like to own their own home but cannot afford to buy on the open market. The cost of ownership is reduced by:
- The rent is less than the rate charged on the open market and usually charged at 2.75% of the property value per annum,
- You can start with a little as 25% share in some cases,
- Your deposit can be 5% of the price of the share, not of the whole property.
- Stamp duty land tax (SDLT or simply ‘stamp duty’) can generally be deferred until your share reaches 80%.
Shared Ownership properties can often be found in private developments as the provision of a certain number of Shared Ownership units will often be required as a part of the planning permission for a development, This can put affordable housing in the heart of some prestigious postcodes.
When I part-buy/part-rent my home, what am I buying?
Effectively you are buying a leasehold house or flat. that may be either new or a resale. However, as you cannot presently afford to purchase outright, you are paying rent on the portion that you cannot afford.
You have the option to buy further shares, up to and including 100% ownership when you are able to do so.The price of buying further shares will be based on an independent valuation at the time that you purchase the further share.
What are the eligibility rules for Shared Ownership?
- You must be at least 18 years old
- Outside of London your annual household income must be less than £80,000
- In London your annual household income must be less than £90,000
- You should generally be a first time buyer, i.e. you don’t already own a home. If you do already own, you must be in the process of selling it
- You should not be able to afford to buy a home suitable for your housing needs on the open market
- You must show you are not in mortgage or rent arrears
- You must be able to demonstrate that you have a good credit history (no bad debts or County Court Judgements) and can afford the regular payments and costs involved in buying a home
You should have savings or to be able to easily access at least £4,000 to cover the costs of buying a home. This is a guideline figure – the actual amount you need will depend on the Help to Buy option you choose
In most cases you will also need to have enough savings or be able to easily access a minimum 5-10% of the equity share you are buying, as a deposit.
Please note: You should always check the eligibility required with the housing association selling the property, as they may have specific criteria.
How to buy a Shared Ownership home
Getting started with Shared Ownership is not as complicated as people might think. First of all. you should check if you are eligible. Please note that in addition to the general eligibility rules, some Housing Associations and boroughs have their own terms regarding priorities and affordability. These will be made clear on each property listing.
With Share to Buy you can search for suitable Shared Ownership properties, show your interest for properties and contact Housing Associations for viewings.
When you have chosen a property, you will have to make sure you have the required deposit and get a mortgage. Helpfully, each property available for sale on our website includes a budget calculator which gives you an indication of the monthly cost you may have to pay.
To research the mortgages available across the market you can use our the Share to Buy Mortgage Affordability Calculator to determine how much you may be able to borrow, and the Share to Buy Mortgage Comparison Tool gives you insight into the Shared Ownership mortgages available on the market.
Search our Guides and FAQs
Can I purchase any property on a Shared Ownership basis?arrow_downward
No, Shared Ownership is only available on specific, purpose-built properties. Find out more on our FAQs page: Can I buy a Shared Ownership home?
Does Shared Ownership mean sharing with another person?arrow_downward
While you’re welcome to buy with another person, Shared Ownership does not mean you have to share the ownership of the property. Find out exactly what Shared Ownership means on our FAQs page: Can I buy a Shared Ownership home?
How many bedrooms am I entitled to purchase?arrow_downward
There is no longer a restriction on the number of bedrooms you can have within your Shared Ownership home. For information about the type of home you can purchase and affordability, head to our FAQs page: Can I buy a Shared Ownership home?
What is a resale Shared Ownership property?arrow_downward
Resale homes are a type of property that you can purchase through the Shared Ownership scheme, and offer some differences from New Build homes. For more information, visit our FAQs page: Can I buy a Shared Ownership home?
What size share can I purchase in a Shared Ownership property?arrow_downward
The share you can purchase can vary depending on the housing provider and your financial situation. For full information, visit our FAQs page on buying a home through Shared Ownership.
Who is responsible for repairs of my Shared Ownership home?arrow_downward
This will depend on factors such as whether you own a house or a flat, and if the repairs are internal or related to the structure of the property. Find out what you need to know about repairs in your Shared Ownership home on our FAQs page: Responsibilities of a Shared Ownership buyer.
How long does it take to get a property via Shared Ownership?arrow_downward
This will depend on a number of factors. For more information, visit our FAQs page on buying a home through Shared Ownership.
Can I increase my share of my Shared Ownership property to 100%?arrow_downward
You can increase your share through a process known as ‘staircasing’, however there may be some restrictions on this. View more information about staircasing on our FAQs page: Buying a home through Shared Ownership.
Can I decorate my Shared Ownership home?arrow_downward
You are free to decorate your Shared Ownership home as you see fit, however there may be restrictions on major alterations. For more information, visit our FAQs page: Responsibilities of a Shared Ownership buyer.
Can I take a lodger or sub-let when I own a Shared Ownership property?arrow_downward
Most Shared Ownership leases do not allow you to sublet your home, however lodgers are often allowed, given that you get permission from your housing association. To find out more about the rules relating to sub-letting and lodgers, check out our FAQs page: Responsibilities of a Shared Ownership buyer.
Can I make adaptations / alterations to my Shared Ownership property?arrow_downward
While you’re able to decorate your home as you like, you will require permission to make larger alterations. View more information about adaptations on our FAQs page: Responsibilities of a Shared Ownership buyer.
What is a Shared Ownership lease?arrow_downward
The Shared Ownership lease sets out the rights and obligations of both the landlord (i.e. the housing association) and tenant (i.e. the shared owner). Find out what you need to know about Shared Ownership leases on our FAQs page: Buying a home through Shared Ownership.
I am over the age of 55, can Shared Ownership help me?arrow_downward
Yes, you can still by a Shared Ownership home. However, the property you purchase would be available through the ‘Over 55’s Shared Ownership’ scheme which has some differences. To find out more about the scheme, head to our FAQs page: Can I buy a Shared Ownership home?