What is Shared Ownership?

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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 a 25% share if buying through the existing scheme, or from as little as 10% if buying through the updated Shared Ownership model.
  • 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 is Shared Ownership changing?

The government previously announced their Affordable Homes Programme – a new investment which will see a £12 billion boost into the housing sector, providing up to 180,000 new homes across the country. A new model for the part-buy part-rent scheme will also be implemented on new build Shared Ownership properties delivered through the Affordable Homes Programme for five years from April 2021.

This new model means the following for buyers purchasing a home through Shared Ownership:

  • The minimum initial share buyers are able to purchase will be lowered to 10%, compared to the current 25%.
  • The introduction of a 10-year repairs and maintenance warranty.
  • The introduction of longer leases on new build homes.
  • Shared owners will be able to buy additional shares (also known as ‘staircasing’) in 1% increments, compared to the current 10%.
  • Shorter nomination periods for shared owners who are looking to sell their home.

If you are interested in a specific new build property or development, we would recommend discussing your options with the relevant housing provider as the new model is still in its early stages. You can also visit the government website to find out more about the new Shared Ownership model and register with Share to Buy to keep up to date with the latest announcements.

Some homes available with a minimum 10% share are already listed on Share to Buy, so head to our property portal to start your search!



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 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.