The only way is up: how to increase your equity in a shared-ownership home

A new shared-ownership scheme is allowing people to buy an extra one per cent of their property each year. The more equity you own, the less rent you pay, so monthly outgoings are lower.
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Shared ownership is flexible as well as affordable, allowing buyers to purchase more chunks of equity as their financial circumstances improve. While many are content to remain as part-owners, others such as young career professionals with rising earnings have a clear strategy and timetable to becoming outright owners, a process known as "staircasing".

Like thousands of young Londoners with bright career prospects, research analyst Johnny Morris, 29, and fiancée Helen Brayley struggled to get on the housing ladder. "We were renting in a shared house in Ealing and were desperate to get our own place," says Brayley, 31, a civil servant. "We could afford a mortgage but the big obstacle was the huge deposit required when buying on the open market."

The couple found a new shared-ownership scheme in Swiss Cottage and were eligible to buy. At the time, Brayley was a student. They put down a £15,000 deposit and bought a 35 per cent equity share of a roomy, one-bedroom flat with a balcony in a small block. "We pay about £1,200 a month in mortgage, rent and service charge. We love it, and plan to buy more equity," says Brayley.


Usually people "staircase" in extra shares of 10 or 25 per cent. The amount to be paid is linked to the prevailing market value of the property so if your home has risen in value since you bought the initial share, the price of the extra share will also be higher. Equally, if there is a dip in property prices, that can be a good time to staircase as you pay less for the extra equity. 

Shared Ownership Plus
If you have made home improvements, this will be reflected in the valuation. Housing associations insist independent surveyors are used to assess market value, though buyers can nominate their own surveyor and an average of the two will be taken.

Thames Valley Housing has introduced Shared Ownership Plus, a scheme allowing people to buy an extra one per cent of their property each year. The more equity you own, the less rent you pay, so monthly outgoings are lower. For shared ownership to work as a complete housing solution there needs to be a buoyant resales market, allowing people to move on or trade up and take any equity gain with them.

Housing associations like to see this mobility, but are keen for others to benefit from low-cost home ownership, so they stipulate that sellers give them an exclusive period, say eight weeks, in which to find a suitable buyer.

This is often the best way forward for sellers as associations usually have a list of ready buyers. Traditional estate agents have steered clear of selling part shares but they are now moving into this market. Sellers have to pay the valuation fee, about £200, plus their legal costs and a sales commission, typically 1.5 per cent.

Even if you only own a share, it is possible to sell 100 per cent of the property if there is a willing buyer. This is called "back-to-back staircasing". Basically, the housing association allows you to increase your share to 100 per cent and sell the property on the same day.

Estate agent Currell, with offices in east London and Battersea, acts for part-owners at Peabody schemes.

Resales start at £38,750 for a 25 per cent share of a one-bedroom flat at St Joseph's Court in Abbey Wood, and rise to £75,000 for 25 per cent of a one-bedroom flat at Heron Place, Royal Docks. Call 020 7704 5618 or visit

We're buying the other 50 per cent
Pete Lockley and his wife Jo have decided to buy the remaining 50 per cent of their shared-ownership home

Six years ago, Pete Lockley, then a pupil barrister, bought a 50 per cent share of a two-bedroom flat in Hoxton. "Shared ownership was the only way of getting on the property ladder. My preference was to live in west London, but when I did a web search and typed in my budget, the only result was a car parking space — so I had to look elsewhere."

It was a good time to buy in what is now a fashionable part of east London. Hoxton property prices have since raced ahead and the value of Lockley's original equity chunk has jumped, too. "Last year I decided to buy the remaining 50 per cent. I'm now married to Jo (both pictured) and we have just had our second child."

The property is worth £395,000 today. "Owning it outright gives us more flexibility to sell and buy a bigger home on the open market," says Lockley. "We wouldn't be in this position without shared ownership."

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