If you are on the hunt for your first home or maybe looking to relocate, you’ve likely heard the term “shared ownership.” So, what is shared ownership?
Definition
Shared ownership is where the property is owned by more than one party, usually a housing association and the buyer. It is a government-backed scheme. started in 2021.
How does it work?
When the developer sells the house, they or the housing assosiation keep ownership of a share of the property and charge rent for the portion of their share to the buyer.
The share that a buyer can own can be as little as 10%.
What are the benefits?
- Shared ownership allows buyers to get onto the property ladder with a lower budget.
- Since buyers can purchase as little as 10% of the property’s value, this means they can take out a much smaller mortgage.
What are the negatives?
- As you have to pay rent on the developer’s share, it can be quite expensive if your ownership share is small.
- When it comes to selling the house, you will have to pay the developer for their share.
Can I get shared ownership on new build houses?
- Yes, the majoirty of shared ownerhsip schemes are offered on new build properties with new developments.
- Most developers also offer other benefits, such as cash incensitives or home improvements such as new kitchens.
Who offers mortgages for Shared Ownership?
Most high-street lenders, such as Barclays, Natwest and Halifax offer shared ownership products.
Building Societies and specialisit lenders also offer them.
Can I use a help to buy ISA for shared ownership?
Yes, you can use the Help to buy ISA as a deposit, as long as the full market value of the property doesn’t exceed the schemes maximum property value.
In london, the maximum property value for the scheme is £450,000, with the rest of the country being £250,000.
Can I buy more of a share of property over time?
Yes, you can buy more ownership of the property over time from the developer or housing assoication, this is called staircasing.
Frequently Asked Questions
What is Shared Ownership?
Shared Ownership is a government-backed scheme that allows you to buy a share of a property usually 10% to 75% and pay rent on the remaining portion owned by a housing association or developer.
Can I buy more of the property later?
Yes, this process is called staircasing. You can buy more shares of the property over time.
Who is eligible
You may be eligible if:
- You rent a council or housing association property
- Your household income is under £80,000 (or £90,000 in London)
- You’re a first-time buyer or used to own a home but can’t afford one now
Can I sell a Shared Ownership property?
Yes, you can sell your share at any time. If you don’t own 100%, the housing association usually has the right to find a buyer first before you can market it yourself.
Are Shared Ownership properties leasehold?
Yes, most Shared Ownership homes are sold as leasehold. Be sure to review the lease terms, ground rent, and service charges before committing.
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