Buying a home outright isn’t possible for everyone – especially in higher-priced areas – but Shared Ownership can give you a realistic way to get on the property ladder.
With a Shared Ownership mortgage, you buy a share of a property (usually, initially between 10% and 75%, however, this can vary between housing providers) and pay a subsidised rent on the remaining share to a housing association. Over time, you may be able to buy further shares until you own your home outright (it is worth noting some housing associations have restrictions on potential staircasing) – a process known as staircasing.
Shared Ownership homes can be new build, or resale properties, with existing shared owners, selling their shares in the property.
What is Shared Ownership?
Shared Ownership is a government-backed scheme designed to help people who might struggle to buy a home on the open market. It can be particularly helpful if:
- You’re a first-time buyer trying to purchase in a high-demand area such as a major town or city.
- Former homeowner who cannot afford to buy a home on the open market.
- You have a smaller deposit.
- Your income won’t stretch to a full market-value mortgage.
Instead of buying 100% of the property, you purchase a share and pay rent on the part you don’t own. This can make your monthly costs more affordable than buying the same home outright.
How do Shared Ownership mortgages work?
With a Shared Ownership mortgage, you borrow against the portion of the property you’re buying, not the full value of the home.
For example:
- Imagine the home you want to buy is worth £300,000.
- You decide to buy a 30% share. That means you’re buying £90,000 of the property.
- Your mortgage is based on that £90,000 share (subject to your deposit, affordability and lender criteria).
- You then pay rent to the housing association on the remaining 70% share.
- There will also be service charge and ground rent to consider in the monthly costing, set out by the housing association
As a guide, the rent is often set at around 3% of the share you don’t own each year. The exact amount will depend on the housing association’s terms.
You will also need a deposit. This is usually between 5% and 10% of the share you’re buying, rather than the full property value. So, if you’re buying a £90,000 share and need a 10% deposit, that would be £9,000 (plus any fees and costs).
Over time, if your circumstances allow, you may be able to increase your share in the property through staircasing. In some cases, you can eventually own 100% of the home.
It's important to understand that your application will be assessed in two separate stages. First, we'll check whether you meet the eligibility criteria for the Shared Ownership scheme. Second, we'll assess whether you're eligible for a mortgage and whether it's affordable for you.
These are two separate assessments. Meeting the criteria for the Shared Ownership scheme does not automatically mean you will qualify for a mortgage, and equally, being eligible for a mortgage does not necessarily mean you meet the requirements for the Shared Ownership scheme.
Who is eligible for Shared Ownership?
To qualify for most Shared Ownership schemes, you’ll usually need to meet criteria such as:
- You are at least 18 years old.
- Your household income is less than £80,000 per year (or under £90,000 in London and Greater London).
- You do not already own another property.
- You are able to obtain a suitable mortgage, including passing affordability and credit checks. If you are a cash buyer you must meet the cash buyer criteria set out by the governing body, Home England.
- You have a deposit, often between 5% and 10% of the share you plan to buy, this can vary dependant on lending criteria.
Eligibility rules can vary slightly between housing associations, developers and lenders, so it’s important to get personalised advice before you apply.
Specialist Shared Ownership advice – wherever you’re buying
Whether you’re looking at a Shared Ownership development in a busy city, a commuter town or a more rural location, it helps to have an adviser who understands both the scheme and the market.
Our Shared Ownership specialists:
- Work closely with housing associations, developers and introducers nationwide.
- Have experience with new build Shared Ownership sites in locations across England.
- Can speak with you by phone, video call or face-to-face, at a time that suits your schedule.
This means you can get Shared Ownership mortgage advice that fits around your life, whether you’re based in London, the South-East or elsewhere in England.
Why choose Just Mortgages for your Shared Ownership mortgage?
The shared ownership process is more complex than a standard purchase – there are extra parties involved and specific rules and guidance that must be followed. Our aim is to make the process as clear and straightforward as possible.
When you speak to Just Mortgages about Shared Ownership:
- You talk to a qualified mortgage adviser
All of our advisers are professionally qualified and receive bespoke training on the Shared Ownership process before giving advice. - You receive tailored advice
We’ll look at your circumstances, explain how Shared Ownership might work for you, and discuss your options in clear, straightforward language. - You choose how and when you speak to us
Our advisers are locally based and can meet you at home, at a convenient location, or via Zoom or a phone appointment – including evenings and weekends, subject to adviser availability.
- Specialist Administrative support
Our dedicated New Build and Shared Ownership team has extensive experience supporting customers purchasing through these schemes. Once your mortgage application has been submitted, you will be supported by a dedicated case administrator who will guide you through the process and keep you updated through to completion.
- Established relationships with housing providers
We work closely with many housing providers and have built strong working relationships over the years. This allows us to communicate directly with them throughout your purchase, helping to answer queries quickly and keep your application progressing as smoothly as possible.
We’ll guide you from your initial enquiry through to completion, keeping you updated at each stage.
Your next steps
If you’re thinking about buying a Shared Ownership home, here are some simple ways to get started:
Speak to a Shared Ownership specialist
Arrange an appointment with one of our advisers to talk through your situation, check your eligibility and discuss the next steps.
Download our Shared Ownership brochure
Find out more about how the scheme works, the buying process and what to expect.
Please click here to download our shared ownership brochure
Use our Shared Ownership affordability tools
Visit our Shared Ownership Affordability Calculator to get an idea of what you might be able to borrow and what your monthly costs could look like.
Affordability Calculator | Just Mortgages
Buying through Shared Ownership is a big decision. We’re here to help you understand your options so you can decide if it’s right for you.
FAQ
Q: Can I eventually own 100% of my Shared Ownership home?
In many cases, yes. Most Shared Ownership properties allow you to buy additional shares in your home over time through a process called staircasing. This means you can increase the share you own in stages and, for many properties, eventually own 100%.
However, some Shared Ownership properties have staircasing restrictions written into the lease. For example, some homes may only allow you to purchase up to 80% ownership. If this applies to your property, it will be explained to you before you complete your purchase.
If you're unsure whether your chosen property has any staircasing restrictions, your housing provider or mortgage adviser will be able to explain this to you.
Q: Is Shared Ownership only for first-time buyers?
Shared Ownership is popular with first-time buyers, but you don’t always have to be buying your first home. You must not own another property at the time of purchase and must meet the eligibility criteria for the scheme and the specific development.
Q: Can I sell my Shared Ownership property in the future?
Yes. You can usually sell your share in a Shared Ownership property. The housing association will often have first refusal to find a buyer for your share before you can market it more widely. The process will be set out in your lease.
Q: Do I pay service charges as well as rent and my mortgage?
On many Shared Ownership developments, you may also pay service charges. These can cover things like communal areas, building insurance or maintenance. Your adviser will explain what to expect so you can budget accurately.