Shared ownershipEverything you need to know about shared ownership
What is Shared Ownership?
Shared ownership is one way to get onto the housing ladder. Put simply, it means the ownership of your home is shared between you and us – in other words, you ‘part buy, part rent’.
You will buy a percentage, usually between 25% and 75%, of the property, either funded by yourself or with a mortgage, and pay rent on the rest.
It is designed to help people with small deposits get on the property ladder. When you can, you can buy more shares until eventually you own 100% of your home.
It is important to know that whilst shared ownership is a great option for many, it won’t suit everyone’s circumstances, so we would always advise that you take independent advice before entering into any purchasing agreements.
You can also find more information on the government website.
What are the benefits of shared ownership?
One of the biggest barriers to buying a home is often the size of the deposit you need to secure a mortgage.
The benefit of shared ownership is that, unlike buying a house outright, you won’t need such a big deposit because you are only paying for the percentage of the property you are buying.
This means you can get onto the property ladder more quickly than you might if you were saving up to buy a home outright.
It can also sometimes be cheaper than renting, although not always.
You can buy additional shares as time goes by (this is called staircasing). If you sell your shared ownership home you will benefit from any increase in its value.
What you need to know before entering into a shared ownership agreement
Whilst shared ownership is great for some, there can be drawbacks for others.
It is important you understand the full terms and conditions of shared ownership before deciding if it is right for you. Please seek advice from an independent financial and mortgage advisor.
It is important to understand, you can only buy where our shared ownership properties are, and this may not be your preferred location.
If the value of your home goes up, the shares will become more expensive, which might make staircasing – or increasing your share – more difficult. But the cost could come down too if the value of your home falls.
You might be required to pay service charges.
Finally, not all banks and building societies offer shared ownership mortgages. However, we can help by advising you on those banks that do.
Are you eligible for shared ownership?
You are normally eligible for shared ownership if:
- Your household earns less than £80,000 per year.
- You’re a first-time buyer or used to own a home but cannot afford to buy one now.
- You are able to obtain or mortgage or have the funds for your share.
- Your income is enough to cover the mortgage, your additional rent, any service charges and household bills.
- You have access to £2,500 to cover the fees for buying your property, plus the deposit.
- You have access to a minimum 5% deposit on the share you are purchasing.
Can you buy a share of the house you are currently renting?
No. Only specific properties are available for shared ownership. We advertise them on Right Move.
How do you buy more shares in a shared ownership home?
You can buy more of your home after you become the owner. This is known as ‘staircasing’.
The cost of your new share will depend on the value of your home when you want to buy the share, so expect prices to go up or down over time.
What do you do if you want to move from a shared ownership house?
You can sell your shared ownership home at any time but we retain the right to find a buyer before you put it on the open market. This is known as the nomination period. If you want to sell, please get in touch.
Still have a question about shared ownership?
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