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What is Shared Ownership? Everything you need to know

From how to buy a Shared Ownership property to increasing your share and then selling it, everything you need to know about Shared Ownership.

Guest Author
Words by: Harriet Meyer

Stepping onto the first rung of the property ladder may feel daunting – but Shared Ownership could give you a leg up and help you to own a home that may otherwise have been unaffordable. 

For all the latest information on Shared Ownership, visit our Shared Ownership scheme page.

With Shared Ownership, you only pay the deposit on - and need a mortgage for - the share of the property you're buying.

That means the amount of money needed for the deposit is a lot lower than it would be if you were buying the whole property outright.

With Shared Ownership, the share you can buy is usually between 25% and 75% of the total property, but with some homes, it can be as little as 10%.

You pay a mortgage on the share you own, and reduced rent on the portion you don’t own.

That part is usually owned by a housing association, private developer or local authority.

As time goes on, you can increase your share in the property by buying more of it in increments, until you own all of it outright or are ready to sell it. 

Are Shared Ownership properties all new-builds?

Usually, yes. Most are either new-build or are older shared ownership properties that are being re-sold by housing associations.

And they are always leasehold, which means they'll come with ground rent and service charge costs too.

What are the rules for Shared Ownership?

The Shared Ownership scheme used to be focused on public-sector workers such as nurses and teachers. But provided you meet the following criteria, these days, anyone can apply:

  • You must be at least 18 years old

  • You’re a first-time buyer or are currently in the process of selling your own property

  • You have a household income of less than £80,000 a year, or up to £90,000 in London

  • Buying a home on the open market is unaffordable for you

  • You meet the mortgage affordability criteria

  • You can afford the costs involved (including rent on the portion you don't own, ground rent and service charges)

If you’re aged 55 or over, you may qualify for Older People’s Shared Ownership.

It's similar to the standard scheme, but you’re only able to buy up to 75% of the property.

Once you own this proportion, you won’t need to pay any rent.

Looking for a Shared Ownership home?

We've got thousands to choose from. Simply filter your search by area, number of bedrooms, price and property type.

How do you buy a Shared Ownership property?

The application process may vary depending on where you’re looking to buy. 

Looking for a Shared Ownership property?

Simply filter your search results in our For Sale section to show only Shared Ownership properties

Shared ownership search option

Once you’ve decided on a property and been to view it, you put down a reservation fee, which is usually around £200.

You’ll then undergo a financial assessment with the housing provider to work out what share of the property you can buy.

After that, buying a Shared Ownership pad is just like buying any other home and the next step is getting a mortgage for your share.

Not all lenders offer mortgages on a Shared Ownership basis, so it's worth doing your research first.

How much deposit will I need for a Shared Ownership property, and what are the ongoing costs?

You’ll typically need a deposit of at least 10% of the share of the property you’re buying.

There are also the standard buying costs, such as mortgage arrangement fees, solicitor fees and surveys to think about too.

Find out more about the costs of buying a home.

There's also the question of stamp duty. If the property is less than £625,000, then first time buyers won't pay stamp duty on the first £425,000 of the cost.

Find out more about the first-time buyers stamp duty break here.

Stamp duty calculator

How much stamp duty will you need to pay? Let our calculator do the maths. Here's how stamp duty works.

Who pays the service charges/ground rent on a Shared Ownership property?

That depends on your lease, so you'll need to check it carefully.

Even if you only own a small proportion of the property, you may find you must pay most or all of the service charge.

The charges can vary each year, depending on what maintenance is needed. 

Typically, service charges are lower on houses and higher on flats, which have more communal areas to maintain.

Currently, home owners may also be responsible for paying a proportion or all of the ground rent.

A bill is currently going through parliament to enable leaseholders to extend their leases to 990 years, which would mean they no longer have to pay ground rent.

Find out more about it here.

How do I buy more of my Shared Ownership property?

You can increase the portion of the property you own through a process known as ‘staircasing’, until you own it outright.

How much you pay though, depends on the value of the property at the time.

So, if prices rocket, the amount you’ll pay to own more of your home will increase, too. But if they fall, you’ll pay less.

You can currently purchase additional shares in your property in 10% instalments.

The more of the property you own, the less you’ll pay in rent on the remainder.

And if you manage to buy the entire property, you won’t pay any more rent. 

What happens when I want to sell a Shared Ownership property?

If you want to sell and haven’t increased your share to 100% of the property, the housing association who owns the remainder of it has the right to find a buyer for a period – typically, eight to 12 weeks.

But this can work in your favour as they may have heaps of eligible buyers on their books.

Alternatively, if you own the entire property, you can sell it yourself through the usual processes.

How to sell a Shared Ownership property

Interested in buying a Shared Ownership property?

Register with Zoopla and you can save your Shared Ownership searches, track your favourite properties and set up email alerts for new Shared Ownership homes coming onto the market.

We try to make sure that the information here is accurate at the time of publishing. But the property market moves fast and some information may now be out of date. Zoopla Property Group accepts no responsibility or liability for any decisions you make based on the information provided.