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Shared Ownership

Shared ownership is a way of part-owning, part-renting a property that is designed for people who cannot afford to buy a home outright. It is available through housing associations and there are both government-backed and privately-operated schemes.

Shared ownership usually means that you can buy a stake of between 25% and 75% of the market value of your property with a mortgage. You then pay rent on the remaining share of the property, which is owned by the local housing association.

The rent you pay can be up to 3% of the association's share of the property value. Shared ownership properties are leasehold properties, meaning you will own the lease on them for a fixed period of time, typically 99 years. You also have to pay a service charge for the property, which is usually charged on a monthly basis.

Where can I get a shared ownership mortgage?

Not all lenders offer mortgages for shared ownership, there are only a select number that do and you may not be able to borrow 100% of the share you are buying as there may be extra restrictions for buying a new-build property.

For example, some lenders will only lend first-time buyers 90% of the share they are buying, if it's a new-build house and 80% if it's a new-build flat.

The more money you have to put down as a deposit, the better the mortgage deal you will be able to get, so it is important to seek comprehensive mortgage advice when considering a shared ownership mortgage.

Can I buy extra shares in my home later?

Yes you usually can. Shared ownership schemes usually offer you the option of increasing your percentage stake in the equity of your home as and when you can afford to. This is called stair-casing. The cost of increasing your share will depend on the value of the property at the time.

To do this you will need to pay for the housing association to carry out a valuation of the property and arrange a mortgage to buy the additional share.

What happens if I want to sell my property?

You may sell your shared ownership property at any time but the housing association has the right to find a buyer for your home, if it still owns a share of it and to buy it back first.