What is Shared Ownership?
Shared Ownership – all you need to know!
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 usually a lot lower when compared to the amount that would be required when purchasing outright.
The purchaser has the option to increase their share during their time in the property via a process known as ‘staircasing’, and in most cases can staircase all the way to 100%. In this instance, the shared owner will no longer pay any rent, just their mortgage along with any service charges and ground rent.
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 can’t afford to buy on the open market. Shared Ownership costs are usually lower than other housing options for a number of reasons:
- 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 many cases.
- Your deposit will be 5-10% of the price of the share, not of the full market value 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 a certain number of Shared Ownership homes will often be required as a part of the planning permission for a development. This can help to put affordable housing in the heart of sought-after areas! You can find out more about the costs of buying a Shared Ownership home on our website.
When I part-buy/part-rent my home, what am I buying?
Effectively you are buying a leasehold house or flat, and this will be either a new build or resale home. However, as you cannot presently afford to buy a home outright, you are paying rent on the portion that you can’t afford.
You have the option to buy further shares – up to and including 100% ownership in most instances – if and when you choose to do so. The price of buying further shares (or ‘staircasing’) will be based on an independent valuation at the time that you purchase the further share. You can find out more about the process of buying additional shares in our staircasing guide.
What are the eligibility rules for Shared Ownership?
There are some general eligibility requirements that anyone wishing to buy a Shared Ownership home must meet. The general eligibility criteria for Shared Ownership is as follows:
- 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.
- Shared Ownership purchasers are often first time buyers but if you do already own another home, 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 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 may vary).
You will also need access to the deposit amount required. For Shared Ownership, this will usually be 5-10% of the equity share you are buying.
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
Registering with Share to Buy can help you find a Shared Ownership property.
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 local boroughs have their own terms regarding priorities and affordability. These will be outlined on each listing on the Share to Buy property portal.
With Share to Buy you can search for suitable Shared Ownership properties, register your interest in properties and contact housing associations for viewings.
When you have chosen a property, you will need 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 costs 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 an 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?