Shared Ownership

Shared ownership is a part-buy, part-rent scheme designed to help first-time buyers and those who do not currently own a home afford a property. It allows purchasers to buy a share of a property and pay rent on the remaining share, making homeownership more accessible.

What is Shared Ownership?

In the property market, shared ownership is a government-backed initiative that offers an alternative route to homeownership, particularly aimed at individuals who find it difficult to buy a home outright. Through this scheme, buyers purchase a portion of a property—typically between 25% and 75%—and pay subsidized rent on the remaining share, which is usually owned by a local housing association or another public body.

The main appeal of shared ownership is its lower barrier to entry compared to traditional home buying, as it requires a smaller deposit and mortgage for the share being purchased. Over time, owners have the option to increase their share in the property through a process known as "staircasing," potentially leading to full ownership. The rent on the remaining share is set at a rate lower than the market rate, making monthly payments more affordable.

Shared ownership properties are generally leasehold, and the scheme is subject to eligibility criteria, including income limits and regional restrictions. It's particularly suited to first-time buyers, people with lower incomes, or those who have previously owned a home but now cannot afford to buy one without assistance.

Frequently Asked Questions

Shared Ownership is a term that you may have heard before, but you might not be sure what it means. Here are some common questions and answers to help you understand what it means.

Owners can increase their share through staircasing, which involves buying additional shares of the property over time. The cost of buying extra shares is based on the market value of the property at the time of staircasing. There may be limitations on how often you can staircase or a minimum percentage for each purchase, depending on the terms of your lease.
Eligibility for shared ownership typically includes being a first-time buyer, earning below a certain threshold (which varies by region), and not being able to afford to buy a home on the open market. Some schemes may also prioritize local residents or key workers, such as nurses or teachers.
Besides mortgage payments and reduced rent on the portion of the property not owned, shared ownership homes may come with additional costs, such as service charges for maintenance of common areas and buildings insurance. It's important to review the lease agreement carefully to understand all potential costs.