Shared ownership allows you to part-buy, part-rent your home, offering you an affordable first-step onto the property ladder.
What is Shared Ownership?
Shared ownership provides an affordable way for you to take that first step onto the property ladder; simply buy a share in a new home and pay a subsidised rent on the remaining share.
The initial share you buy will usually be between 25% and 75% of the full purchase price and is tailored to suit your circumstances, meaning it is not only affordable for you now but in the future too.
In most cases you have the opportunity to purchase further shares in your home if you wish to; this is known as ‘staircasing’. When you purchase further shares in your home the rent reduces accordingly and if you staircase to 100% ownership there is no rent to pay.
A variety of homes may be available from one bedroom apartments right through to large family homes.
Shared ownership doesn’t mean that you have to share your home with anyone else! Shared ownership homes are sold on a ‘leasehold’ basis and when you buy a home with shared ownership you are a homeowner and will take on all the responsibilities and gain all of the benefits that go with owning your own home.
You are investing in your own home rather than paying rent with no return. You will only need to secure a mortgage for a percentage of the property price rather than the whole amount which makes it more affordable in the short term. You’ll need a much smaller deposit than if you took out a mortgage for the whole property.
The combined monthly mortgage and rent payments of shared ownership usually work out cheaper than buying the entire property straightaway, and often less than renting a similar property privately. In most cases you can buy additional shares of your home if you want to, meaning that as your income increases you can buy more of your home. The more of your home you own, the less rent there is to pay. You only buy the share you can afford so you don’t overstretch yourself financially.
You may be eligible for shared ownership if:
- Your household income is £80,000 a year or less, or, in London, if your household income is £90,000.
- You are unable to buy a suitable home on the open market.
Priority for shared ownership is given in the following order:
- Existing Social Housing Tenants and MOD Personnel Local Priorities as set by the Local Authority (these may vary from development to development).
- Other first time buyers.
Although shared ownership is usually aimed at first time buyers, applications from non-first time buyers may also be considered in some circumstances.
Shared Ownership Case Studies
Check out these real-life shared ownership stories.