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This is what shared ownership means

Shared ownership is another way to buy your own home. You buy a percentage, and pay rent on the rest. The housing association owns part of it — but you’re living there, you decorate it, and you decide when to sell. Buying a percentage means a smaller deposit and smaller mortgage. It’s a sooner first step on the ladder for lots of people. Usually, you can also carry on buying shares, to own it 100%.

You're probably still wondering...

Here are some common things people want to know about shared ownership. Make sure to read your T's & C’s and do your research.

With rising house prices and a generation that feels disillusioned with the prospect of buying, shared ownership is more relevant than ever.

It’s another option
If buying on the open market feels impossible, and you’ve had enough of private renting, shared ownership is another avenue for buying your own home.

The deposit’s smaller
Because you’re only buying a share of the property, the deposit is naturally a lot smaller.

It’s an investment
It’s a way of putting your money into property, even if you can’t afford to buy on the open market.

It’s yours
Shared ownership properties don’t have a lot of the same restrictions as private renting. You can decorate, sometimes stay for at least 125 years, buy more shares when you want, and sell when you want.

First you’ll need a deposit, typically between 5% or 10% of the share you’re buying. This could be as little as £5,000.

After you’ve put down a deposit (and paid any legal fees), you’ll be paying your mortgage, rent, and possibly service charge each month. Your mortgage is worked out based on the size of the share you’ve bought, and your rent is paid to the housing association you bought your property from. (It’s good to note that your rent will be reviewed every year based on market fluctuation, so remember to check your lease carefully for details of possible rent increases.)

So, let’s say you decide to buy a 25% share of a £250,000 shared ownership property, and put down a deposit of 5% (£3,750).

Your monthly payments might look something like this:
Mortgage – £340
Rent – £390
Service charge – around £80, depending on the property
Total: Approximately £810 per month

Yes, pretty much. You’re buying a share of a property, so therefore pay a mortgage on the part you own. An independent mortgage advisor can help suggest which type of mortgage might be best for you, based on your situation.

That’s down to your financial circumstances. An independent mortgage advisor can help you decide what size share of the property is right for you.

Usually, the smallest share you can buy is 25%. The largest starting share you can buy is 75%. Over time, you can usually staircase (buy more shares of the property) all the way up to 100%.

‘Staircasing’ is a term that refers to increasing the share of the property you own. You can do it gradually over time, to eventually own your home 100%.

The cost of additional shares is calculated by the market value of your home when you decide to start staircasing.

Some housing associations (only a few) cap the amount of shares you can buy. Make sure you discuss this with your housing association, so you’re clear on exactly how much you can staircase before you buy a property with them.

It’s usually fine to have a lodger, but no, subletting isn’t allowed. Airbnb included, unfortunately! There might be a few special circumstances, but it’s up to your housing association.

(Subletting means renting out your whole house, lodging is just one room.)

Yes, you own your share so it’s yours to sell whenever you want. You’ll essentially be selling your share to another shared ownership buyer, through the housing association and their property listing channels. You’ll need to get its market value determined by an independent surveyor.

If you’ve staircased all the way to 100% and own it fully, you can often sell on the open market – but your housing association has right of first refusal.

Selling back to the housing association means you might make less of a markup, but it’s usually quicker and easier than selling it on the open market. It also means the housing association can carry on using your property to help other people become homeowners. Swings and roundabouts.

You’re a homeowner, so it’s up to you to keep the place in good condition and fix anything you’re not happy with. If you’ve got a house, you’re responsible for repairs and maintenance inside and outside. If you’re living in a flat, you only need to worry about the inside – but you’ll probably need to contribute a bit of service charge for the building and grounds. 

Within reason! You don’t need anyone’s permission to hang pictures, strip the hallway, or paint every room a different colour. But knocking down walls or any other structural changes will need the housing association’s say. Of course, any improvements you make to the property will be taken into account when you want to sell – it could increase its value.

This can be a tricky one. If you’re buying a house, it’s usually fine to bring your pets! However, it’s not always allowed in apartment blocks. It all depends on your lease (your contract with the housing association) so check it thoroughly and ask questions before you buy.

Yes, they both exist to help people buy a home. But they’re different. Bear with us. The Government is using the umbrella term ‘Help to Buy’ to group a few different schemes that are helping people buy a home. (There’s a Help to Buy: ISA, Help to Buy: Equity Loan, and Help to Buy: Shared Ownership). The ‘Help to Buy’ you’ve probably heard about is the equity loan. It’s completely separate.

Here are the main differences:

Help to Buy: Equity Loan
It’s a loan provided by the Government (for your deposit and mortgage), that needs to be paid back over time.

Help to Buy: Shared Ownership

  • You buy a share, usually 25-75%.
  • You only pay a mortgage and deposit on the share you own.
  • You pay rent on the rest.

Shared ownership (what we’re referring to on this website)

  • The same as Help to Buy: Shared Ownership (just with a non-branded name).
  • You buy a share, usually 25-75%.
  • You only pay a mortgage and deposit on the share you own.
  • You pay rent on the rest.

On the whole, yes. You’re not allocated a property or put in a random lottery. However, your circumstances do come into consideration. For instance; if you’re a couple, you’re less likely to get a five-bedroom house opposite a school than the family of seven who applied. But it works both ways – you might get priority on a great apartment near your work.

Eligibility requirements apply. It’s best to find a property you like and check with the housing association who is selling the property, to make sure it’s right for you.

Here are a few things your housing association might factor in:

  • Where you work.
  • Whether you’re a first-time buyer.
  • If you’ve got children.
  • Whether you’re an existing local authority or housing association tenant.

All the jargon

There’s a lot of jargon to read through when you’re buying a shared ownership home. Here’s a quick rundown of terms you might come across.

Housing association

Housing associations are not-for-profit companies set up to provide affordable homes. They offer shared ownership properties, to help those who can’t buy a home on the open market.

Lease

The lease is the contract for the share you’ve bought. It states how much is yours, what you’ll be paying, and what your responsibilities are.

Share

A share is the percentage of a property you decide to buy.

Staircasing

Staircasing means increasing the size of your share. You might start off with 25%, but gradually buy more shares to own 50% or even 100%.

Mortgage

A mortgage is a loan taken out to buy a property. It’s a fixed amount, and has to be paid back over a certain amount of years.

Deposit

The sum of money you need to put down in order to secure your property, and essentially the first instalment towards buying it.

Mortgage valuation

It’s a report by the mortgagee (the bank or building society that’s lending you the money) which values your property and decides how much you can borrow to buy it.

Service charge

Service charge is the extra money you’ll need to pay to the housing association for things like communal maintenance and repairs.

Estate charge

Estate charge is the extra money you might need to pay for the upkeep of your development's grounds.

Who's it for?

Shared ownership is popular with first-time buyers who are looking to get on the property ladder but can’t afford the deposit and mortgage needed to buy a property outright. It’s also an affordable homeownership option for newly separated couples, or for those in later life looking to downsize. But there are loads of reasons it could work for you. To get started, take our quiz and see if shared ownership could be the right option for you.

Take quiz

First time buyers

Shared ownership is a great option for first-time buyers. The smaller deposit makes getting on the ladder easier and sooner for lots of people. There are also shared ownership properties in a huge range of areas, making it easier to buy a home somewhere more desirable (choice of catchment area for schools etc).

Recently separated

Lots of shared ownership properties are also new builds, which can mean no property chain (where you rely on other buyers and sellers), and therefore less of the stress and uncertainty of buying a house on the open market.

Over 55

If you’re retired and looking to downsize, but don’t want to reinvest as much of your savings into another property, shared ownership is worth thinking about. The smaller mortgage and deposit frees up money for other things, and you’ll still have the security of owning your own home.

What are housing associations?

Housing associations are not-for-profit companies set up to provide affordable homes. You’ll find them in every major town and city across the UK, and their aim is to make housing available and affordable for everyone. The money you pay when buying and renting a shared ownership property goes straight back into funding more projects to help more people. Housing associations have been offering shared ownership for a number of years, to help those who can’t buy a home on the open market. Now, with rising house prices and a generation that feels disillusioned with the prospect of buying, shared ownership is a more relevant option than ever.

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How it works

Let's cut to the chase – how does shared ownership actually work? There are slight variations in process between housing associations, but here's a general idea of what to expect. Before getting started, you’ll need to find out whether shared ownership could be right for you. Take our quiz to find out.

Take quiz

1

Find a house

Have a browse and find a property you're interested in.

2

Get in touch

Register your interest in your favourite properties with your local housing association.

3

Check it's right for you

Your housing association will ask you a bit about you, your financial situation, and what you're looking for.

4

View the property or plans

Once they check shared ownership is right for you, they’ll invite you to go see the property or look over the plans.

5

Apply

When it’s time to get the ball rolling, they’ll ask you for your full application.

Shared ownership
Buying on the open market

Much smaller (as little as £7,000) because it's a percentage.

Deposit

A full deposit for the whole property (usually quite a big one).

All over the UK, in lots of areas otherwise too expensive to consider on the open market.

Location

Anywhere, but limited to areas within your budget.

Typically new-build – nothing to fix or repair before moving in.

Property type

A wider range of properties; Victorian terraces, houseboats, whatever you like.

Shared ownership
Private renting

You’re a homeowner, so every month’s mortgage is an investment in your future

Investment

You won’t see a return on anything you spend while renting.

You can stay in your home for as long as you like (well, at least 125 years).

Stability

You could be asked to leave at any time.

You’re free to decorate or change things. Sometimes you can even renovate, with permission from the housing association.

Decorating

You’ll usually have to leave the place exactly as you found it, and will get fined otherwise.

You pay a monthly mortgage, rent, and (if you’re in a flat) service charge. Your rent can increase year to year, but there are regulations on how this is calculated.

Monthly fees

You pay monthly rent, and service charge if you’re in an apartment block. Your landlord’s free to increase the rent however and whenever they see fit.

Shared ownership
Help to Buy

It helps people become homeowners.

Purpose

It helps people become homeowners.

You buy a share of a property, and pay rent on the rest to your housing association.

What it involves

You’re taking out a government loan that needs to be paid back (alongside your mortgage).