All you need to know about Shared Ownership

Buying a home outright isn’t always achievable, especially with rising house prices and deposit requirements. Shared ownership offers an alternative route onto the property ladder, helping people buy a home in a more manageable way. But how does shared ownership work, and what are the benefits?

What Is Shared Ownership?

Shared ownership is a government led scheme that allows you to buy a share of a property—usually between 10% and 75%—and pay rent on the remaining share, which is owned by a housing association or provider.

Over time, you may have the option to buy more shares in the property, a process known as ‘staircasing’, until you eventually own 100%.

Here’s a step-by-Step guide to Shared Ownership…

1. Buying Your Initial Share
   You purchase a percentage of the property’s market value. For example, if a home is worth £300,000 and you buy a 25% share, you’ll pay £75,000 (usually with a mortgage and deposit).
2. Paying Rent on the Remaining Share
   You pay a reduced rent on the portion you don’t own. This rent is typically lower than private market rent and is set by the housing provider.
3. Monthly Costs
   Your monthly payments usually include:
• Mortgage repayments on your owned share
• Rent on the remaining share
• Service charges (if applicable)
4. Staircasing
   When you can afford it, you can buy additional shares, increase your ownership and reduce the rent you pay. Some people staircase gradually, while others aim to buy the remaining share in one step.

5.              Selling a Shared Ownership home
You can sell the share you own in your home as the minimum share, or up to 100%. If your buyer would like to purchase your home outright, we will require you to staircase to 100% ownership. This is known as a simultaneous sale which allows you to sell your Shared Ownership home to a full-market buyer without needing to fund the final staircasing yourself in advance. Instead, you agree a sale with a private buyer, and the day of completion, part of their purchase funds are used to buy the remaining share from your provider. This enables you to staircase to 100% and complete the sale in one smooth legal transaction. It's an efficient and cost- effective route for Shared Owners who want to access the full open market but do not have the funds available to staircase outright before selling.

The Benefits 

1. Lower upfront costs

Because you’re only buying a portion of the property, the deposit and mortgage required are often significantly lower than buying outright.

2. A more affordable route to home ownership

Monthly costs are often lower than private renting, whilst giving you the security and benefits of owning your own home. This includes sharing in any property value movements relative to the share you own. 

3. Flexibility to increase ownership

Shared ownership allows you to buy more of your home over time, as your income or circumstances change.

4. Security and Stability

Unlike renting privately, shared ownership offers long-term security. 

5. Well-Maintained Homes

Shared ownership properties are often new-build or recently built homes, meaning modern layouts, better energy efficiency, and lower maintenance costs initially.

Is Shared Ownership right for you?

Shared ownership can be a great option if:

• You can’t afford to buy a home outright
• You want a more stable alternative to renting
• You expect your income to increase over time
• You have a household income of less than £80,000 outside London, and less than £90,000 within London

However, it’s important to understand all costs involved and get independent financial advice before committing.

Shared ownership bridges the gap between renting and full homeownership. By spreading the cost of buying a home and offering flexibility for the future, it opens the door for many people who might otherwise be priced out of the market.

If you’re looking for a practical, achievable way to own your own home, shared ownership could be worth exploring.