This is a collaborative post.
Shared ownership, also known as ‘part-buy, part-rent’, is a government-backed incentive designed to help individuals aiming to get onto the property ladder. Since the end of Help to Buy, Shared Ownership is now the go-to for First Time Buyers, as the scheme allows you to purchase a portion of a new home while paying rent on the remaining share. This scheme can also enable you to afford a larger home than you might otherwise be able to purchase on the open market.
The percentage you can purchase may be different depending on where you buy the home:
- In England, you can buy shares of between 10% and 75% of the full market value
- In Scotland, you can buy a 25%, 50% or 75% share
- In Wales, you can buy shares of between 25 and 75% of what the home is worth
You purchase a Shared Ownership property through a housing association or local council. The property you buy could either be a new build or a resale of an existing Shared Ownership home. To proceed, you will need a deposit and a mortgage to cover your share of the property. The remaining portion of the property will continue to be owned by the housing association or council, and you will pay rent on that share. The rent is typically capped at up to 3% of the value of the portion they own.
While the housing association or council may retain a significant share, you will still become the owner of the lease, making you the official leaseholder of the property. As the leaseholder, you will be responsible for maintaining and repairing the interior of the home, such as plumbing, electrical systems, and general upkeep. The housing association or council, on the other hand, will take responsibility for the maintenance and repairs of the exterior of the property, including common areas and the building’s structure, if applicable.
Before proceeding with a Shared Ownership purchase, it’s a good idea to fully understand all associated costs, including the deposit, mortgage, rent, and service charge. Additionally, you should review the lease agreement carefully to know your responsibilities as a leaseholder and the extent of the housing association’s role in managing the property. This will help you make an informed decision and plan your finances effectively.
Eligibility
In England, the Shared Ownership scheme is available to households with a combined income of less than £80,000 per year (or £90,000 in London). It is designed for individuals and families who cannot afford a deposit and mortgage payments on a suitable property. In Wales, the income threshold is lower, requiring a combined income of less than £60,000 annually.
To qualify, you must also meet certain additional criteria, such as:
- Being a first-time buyer, or
- Previously owning a home but being unable to afford to buy outright now, or
- Seeking to move from one Shared Ownership property to another, or
- Establishing a new household, such as after a relationship breakdown, or
- Currently owning a home but needing to move and being unable to afford a property outright.
Additionally, applicants must have no outstanding credit issues. Ensuring your finances are in good order before applying is essential.
Eligibility criteria can vary between countries, so it’s important to review the specific requirements in your region before starting the application process.