Shared Ownership

What is Shared Ownership?

This is a scheme available for first time buyers, people who have owned before but are unable to buy now, and current shared ownership participants. It enables these people to purchase a share in a property – between 25% and 75% of the property value – and pay rent on the remaining share. Participants can then purchase more shares in their property at a later date. This is known as staircasing and in most cases it is possible to staircase all the way to 100%, and therefore owning the property outright.

Because you will only need a mortgage to fund your share of the property, the deposit required is less.

E.g., if purchasing 50% share of a property worth £200k, £100k worth of funding will be required. Some lenders will offer 95% mortgages on your share of the property; therefore 5% deposit is needed = £5,000

The rent payable is well below market rate and is generally around 2.75% of the property value per annum – i.e., on the above example, £100k x 2.75% + £2,750 per annum, therefore approx. £229 per month.

Stamp duty can generally be deferred until your share reaches 80%.

You can buy either a newly built home or an existing one through the housing associations’ resale programmes. With resale properties, the minimum share available will be whatever the old owner is selling – for example if someone is selling their property and they own a 70% share, the minimum share available will be 70%.

Who’s eligible?

If your household earns £80,000 a year or less outside London, or your household earns £90,000 a year or less in London.

You are a first-time buyer, you used to own a home but can’t afford to buy one now or are an existing shared owner looking to move.

Military personnel are the only group who will be given priority.

With lending criteria more complicated now due to the pandemic we strongly advise you to speak to a mortgage broker to make sure you qualify.