Shared Ownership
Find out about Shared Ownership in the UK
What is Shared Ownership?
Shared Ownership is one of the UK government’s affordable home ownership schemes, which allows individuals and families to purchase a share of a property (usually between 25% and 75% of its value) and pay rent on the remaining share. There’s also the option to increase the share you own in the property over time, which is called staircasing.
Shared Ownership is an affordable way to get onto the property ladder, especially if you’re unable to afford to buy a property outright.
To find out more about Shared Ownership and the other government schemes visit the Own Your Home website.
Who is eligible for Shared Ownership?
Here are some of the main eligibility criteria for Shared Ownership:
- You must be over 18 years old
- You must be a first-time buyer, or an existing homeowner who is unable to buy a suitable home on the open market
- You must be a UK national, or have the right to live in the UK permanently
- Your household income must be below £80,000 per year (or £90,000 per year in London)
- You must be able to demonstrate that you have the financial means to purchase a share of a property and pay rent on the remaining share
- You must be able to afford the monthly mortgage and rent payments, as well as any other related costs (e.g. maintenance, insurance)
How does it work?
- You'll need to be eligible for Shared Ownership and meet the criteria above
- You'll need to find a property that's available through the Shared Ownership scheme. These properties are usually new build homes or properties that have been owned by a housing association. View Shared Ownership properties
- You'll need to apply for the scheme and go through the usual process of getting a mortgage. The housing association will carry out a financial assessment to determine how much you can afford to pay
- Once your application is approved, you'll be able to purchase a share of the property, typically between 25% and 75% of the property's value. You'll pay a mortgage on this share, and pay rent to the housing association on the remaining share
- The minimum share you can buy has been reduced to 10% but this won’t apply to all Shared Ownership homes yet so it's best to check which model you’re applying for
- As you pay off your mortgage and build up equity in the property, you can choose to purchase additional shares in the property, until you own it outright. This is known as “staircasing“
What type of property can I buy through Shared Ownership?
Under the UK government's Shared Ownership scheme, you can purchase a share of a wide range of properties, including apartments, houses, and bungalows. The properties available through the scheme are usually new builds, although in some cases you may be able to purchase a share of an existing property through a shared ownership resale scheme. Homes are also available that meet specific needs e.g. if you have a long-term disability.
All Shared Ownership homes are sold as leasehold but if you reach 100% ownership, in the case of houses, the freehold will transfer to you. If you reach 100% ownership of a flat, the property will remain leasehold but will no longer belong to the Shared Ownership scheme.
What are the pros and cons of Shared Ownership?
Pros
- Shared Ownership can be a more affordable way for people to get onto the property ladder, especially if you're unable to afford to buy a property outright
- The scheme may allow some people to get onto the property ladder sooner than they might have been able to otherwise
- The scheme allows you to purchase a share of a property and pay rent on the remaining share, which can also be a more affordable option than renting
- You have the option to increase your share in the property over time, which can eventually lead to you owning the property outright
- Shared Ownership properties are usually new build properties, which can be a pro if you prefer modern, energy efficient homes
- The scheme is available to a wide range of people, including first-time buyers and existing homeowners, making it a potentially accessible option for many
Cons
- Not all lenders offer Shared Ownership mortgages
- When you want to sell the property, initially you must try to sell it back through the Shared Ownership scheme rather than on the open market
- You’ll have to pay the service charge associated with your property, no matter how small your share might be
- You may not be able to make significant home improvements unless this is defined in the lease or approved by the landlord or housing association
- The availability of properties through the Shared Ownership scheme can be limited, depending on your location and other factors, so you may need to be patient and flexible in your search for a suitable property
| Previous Shared Ownership Scheme | Current Shared Ownership Scheme | |
|---|---|---|
| Minimum share of property you can buy | 25% | 10% |
| Minimum additional share you can buy once you own the property | 10% each year | 1% share each year with reduced fees |
| Minimum deposit | 5% of your share | 5% of your share |
| Who covers repairs | You are responsible | You’ll receive essential repair support from landlord for 10 years |
| Exclusivity period to sell via existing landlord | 8 weeks | 4-8 weeks |