What is shared ownership?

Shared ownership allows you to buy a share of a property, usually between 25% and 75%, while paying rent on the remaining portion to a housing association. Over time, you can “staircase,” or gradually buy more shares, until you eventually own 100% of your home. It’s designed to help first-time buyers get onto the property ladder with a smaller deposit.

The benefits of shared ownership

• Lower upfront costs: You only need a mortgage for your share, which usually requires a smaller deposit than buying outright.
• Get on the property ladder sooner: Shared ownership is a way to move into homeownership sooner than traditional routes.
• Potential to increase ownership over time: Staircasing lets you gradually increase your share of the property as your finances allow.
• Support from housing associations: Many schemes offer guidance and support, making the process smoother for first-time buyers.

The drawbacks of shared ownership

• Rent on the unsold share: You’ll pay rent on the remaining share, which can increase over time.
• Resale restrictions: Selling a shared ownership property can be more complicated, often requiring approval from the housing association.
• Service charges and maintenance costs: You’re responsible for property upkeep and may have additional service charges.
• Limited flexibility: Staircasing may be slow or restricted depending on the housing association’s rules.

Is shared ownership right for you?

Shared ownership works well if you:

• Are finding it difficult to accumulate a substantial deposit for a traditional mortgage.
• Want to enter the property market sooner rather than later.
• Are comfortable paying rent on part of the property and potential resale limitations.

It may be less suitable if you prefer full ownership upfront, need complete flexibility for future moves, or want to avoid paying rent entirely.

Tips for first-time buyers considering shared ownership

• Check eligibility criteria carefully, as schemes may be income restricted.
• Compare different housing associations and developments to find the best deal.
• Understand all costs, including rent, service charges, and staircasing fees.
• Speak with a mortgage adviser experienced in shared ownership to explore your options.

Curious if shared ownership could help you get on the property ladder?

Contact us today for expert advice and guidance tailored to first-time buyers.