What is Shared Ownership?

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Shared Ownership is a housing scheme which has been designed to help homebuyers who are unable to afford the cost of buying a property outright on the open market. It is governed by the Greater London Authority in London and the Homes and Communities Agency outside of London.

Through Shared Ownership schemes, homebuyers can purchase a share in a new home, usually between 25% and 75%. On the remaining share, purchasers will pay a subsidised rent to the Housing Association, along with a monthly service charge for the property.

Shared ownership is an option for lots of people — probably more than you think. A smaller deposit makes it easier for first-time buyers to get on the ladder, and it's an easier way for separated couples to buy again with their individual share of joint assets.

Shared ownership is also a good option for retirees, or those who want to free up equity without losing the security of owning a home. Generally speaking:

  • Your household income needs to be under £80k (under £90k in London).
  • You can't be the owner of another property.
  • You'll need to show you have a good credit history, and can afford the regular payments and costs involved in buying a home.
  • You should have savings, or be able to put down at least 5-10% deposit on the share of the property you're buying.

Affordable homes are purchased on a leasehold basis and the lease is normally 125 years.

Home Buyers will own an equity share in the property, anything from 25% to 75% dependent on what is being offered by the vendor and financial assessment has deemed the buyer as being able to afford.

Financial ability is assessed by an independent financial advisor and homebuyers are required to buy up to their maximum affordability – there is no charge for the assessment.

Additional shares in the property can be purchased at any time; this process is known as staircasing. The price is always taken from the market value at that time which is determined by an RICS Surveyor.

Properties can be sold at any time. The housing association will normally have a 12 week period in which to find another person to purchase the property under the shared ownership scheme, however if they are unable to find a buyer, after that time the property can be sold on the open market – again the value is determined by and RICS Surveyor.

Each development will have an eligibility criteria and this can be based on the area in which applicants currently live or work and the type of accommodation currently occupied.

Additional information on shared ownership can be found here: https://sharedownership.net/what-it-means