Shared ownership in London: how does it work and how much do you need to earn to be eligible?

Young Londoners with good salaries are buying into shared ownership and should spread the word.
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Ruth Bloomfield18 September 2019

At present, shared ownership is a niche market. Some 200,000 households across England live in shared homes and last year just over 13,400 new homes were completed, about half in London.

More than a third of boroughs offered less than 100 new affordable homes. Increasing the supply of affordable homes is going to be a huge challenge in London.

If you are happily coupled up, have recently celebrated your 35th birthday and earn around £45,000 a year, then guess what? Shared ownership, once seen as a last-ditch way for low earners to buy a small chunk of a starter home, could well be for you.

London’s property market has changed since shared ownership was introduced and so have those taking advantage of it.

Today’s customers are almost invariably young professionals on healthy salaries — the upper limit for buyers in London is a £90,000 household income.

Recent research by housing association Hyde New Homes found that the average shared ownership buyer is 35 and has a household income of £43,848. Nearly two thirds of shared owners are women.

Single buyers at Guinness Homes’ Electric Quarter development in Brixton earned an average of just over £50,000 and took out a 30-year mortgage to make things stack up.

Those buying together had a joint income of £62,521 and were able to cut that mortgage term down slightly, to an average of 20 years.

New views: Guinness Homes' Electric Quarter in Brixton is perfect for shared ownerships

Some buyers still regard the concept of shared ownership with suspicion — unable to get their heads around the idea of owning a property but still paying rent — but when Help to Buy is phased out in 2023 it will become the main form of government-sponsored assistance to buyers priced off the property ladder.

How to get the shared ownership property you want

After five years of renting, John and Scarlett Taylor were ready to own a home of their own but they did not have enough money to buy the old-fashioned way.

So John, 41, and Scarlett, 30, put down a £45,000 deposit to buy a 25 per cent share of a two-bedroom coach house at Beaulieu in Chelmsford through L&Q’s shared ownership scheme.

Stable footing: John and Scarlet Taylor bought a share of a two-bedroom house at Beaulieu in Chelmsford
Hakan Yazici

John, a monitoring and compliance officer at Barking & Dagenham College, said: “We came across Beaulieu on the L&Q website. We drove up there to have a look around and we fell in love with it.”

When the next phase of homes at the development was launched in spring 2018, they applied for a property.

Unfortunately there were more applicants than homes and the couple were left disappointed but undaunted, they made a third attempt and this time their bid was successful.

Their share of their house cost £76,875 and their monthly costs include £417 rent and £194 in mortgage repayments. Household bills add another £260pcm to their outgoings.

Scarlett now works at Beaulieu’s on-site nursery.

“We love the stability of owning our own home. We’re putting down roots in a community and no longer jumping around rental properties.”