Top 10 things you need to know about shared ownership

Shared-ownership schemes are a often an affordable way for first-time buyers to get on the property ladder, thanks to lower deposit requirements and discounted rents. Here we explain how it all works, who is eligible to buy and what happens when you want to sell.
Maple Quays
From £73,750: for a 25 per cent share of a flat at Affinity Sutton's Maple Quays scheme in Rotherhithe
1. What is shared ownership?
A part-buy, part-rent scheme offered by government-funded housing associations. You buy a share of your home (between 25 per cent and 75 per cent of the full value) and pay a discounted rent on the share retained by the housing association.

Normally the combined monthly payments are lower than the cost of renting privately in the same area. And you can get a foot on the property ladder because the up-front costs are lower. Instead of a 20-30 per cent deposit on the full purchase price, you put down 5-10 per cent of the equity share you buy.

Shared ownership does not mean sharing your home with people you do not know. You live there as the sole resident, or with your partner or family.

2. Who can buy?
All first-time buyers who cannot afford a home on the open market. But you have to earn within the household income limits - £64,300 per annum for singles and couples, and £77,200 per annum for families, or £60,000 elsewhere. People relocating for work reasons and divorcees starting again may also qualify. You do NOT have to be a public-sector key worker such as a nurse or teacher, though sometimes it helps.

3. What size home can I buy?
A property with one bedroom more than your current needs, so singles and couples can buy a property with up to two bedrooms, and a one-child family can buy a three-bedroom property.

4. How do I find a property?
The best way is to register with First Steps, the “gateway” to affordable housing schemes in London. Visit

5. Can I buy more equity shares and eventually own the property outright?
Yes, the process is known as “staircasing”. You pay the prevailing market price, set by an independent valuer, on the extra share you buy (see below).

6. Can I rent out my property?
No, sub-letting, even informally renting out a spare room, is forbidden, and is a condition in the lease.

7. What happens if I want to move/sell?
You can sell your share at any time. Often housing associations have right of first refusal. For example, L&Q has the first eight weeks to find a buyer. It instructs a surveyor to determine the value and once sold charges you 1.25 per cent of the full market value, much like an estate agent would.

8. Is there a vetting process?
Housing associations may give priority to groups such as key workers or to families or to people living and working in the area. A financial appraisal aims to ensure you can afford to pay for your new home.

9. Are mortgages available and are there fees to pay?
Yes, more than 20 lenders offer shared-ownership mortgages, and associations can put you in touch with specialist brokers. A2 Dominion housing association has a deal with Santander providing 95 per cent loan to value mortgages. Survey and legal costs are extra. Stamp duty is payable only on part share purchases over £125,000.

10. Is shared ownership cheaper than buying outright on the open market?
Not necessarily. Usually it is more affordable because you are buying a part-share and the deposit requirement is lower. The rent element is about 20 per cent lower than a private rent. Monthly outgoings comprise the mortgage payment to the lender, the rent to the housing association, and a service charge (if you live in an apartment block or house on an estate).

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