Threshold Mortgage Advice

Shared Ownership: The complete guide to part buying your home

Think the only route to home ownership in Britain is by being a cash buyer or taking out a mortgage with a 10% deposit?

Think again.

With Shared Ownership, you can get onto the property ladder with just a low 5% deposit, and almost everyone living on a low income in Britain is eligible.

What is Shared Ownership?

Shared Ownership is a home ownership scheme offered to residents of Northern Island, England, Scotland, and Wales.

The scheme, backed by the UK Government, aims to help those with a low deposit and/or a low income to get onto the property ladder.

How does Shared Ownership work?

Shared Ownership works by allowing you to ‘part buy and part rent’ a property.

It’s available on selected new build homes and designated resale properties in Britain, via participating Shared Ownership developers, housing associations, and local councils.

Buying a home this way means you will own part of your home – normally between a 10% to 75% share, depending on the price of your home and the percentage you can afford.

You will then pay rent on the portion of your home you have not purchased.

Can anyone buy a Shared Ownership home?

Shared Ownership is designed for those on lower incomes and/or those who only have a low amount of savings, so there are some eligibility rules you will need to meet to qualify.

The criteria for a Shared Ownership home (as of 2024) are:

  • A total household income of £80,000 or less a year (£90,000 if you’re applying in London).
  • Not having enough savings to afford a deposit on a home that meets your needs on the open market.

In addition, you must also meet one of the following conditions:

  • You’re a first-time buyer (you’ve never owned or part owned a property anywhere in the world before).
  • You previously owned a home but do not currently own one and cannot afford to buy one now.
  • You need to form a new household – for example, because of divorcing or splitting up from your partner.
  • You currently own a Shared Ownership property, but you would like to move to a different property.
  • You own a home and need to move but can no longer afford the size or type of home you need in the location you live in.

Some Shared Ownership schemes will also require you to demonstrate a local connection to the area you want to buy in. For example, you may need to provide evidence that you already rent, live, or work in the catchment of the development.

How much deposit do I need for a Shared Ownership home?

You normally need a minimum 5% deposit to buy a share in a Shared Ownership home. This 5% isn’t the full market value of the property, but of the share you wish to purchase.

For example, let’s imagine you want to buy a 25% share in a property that has a full market value of £200,000. As 25% of £200,000 is £50,000 and 5% of £50,000 is £2,500, you would need to put down a £2,500 deposit to purchase your 25% share in this home.

In addition to your deposit, you would also need to take out a mortgage for £47,500. This is the cost of the share you are buying (£50,000) minus your deposit.

How is rent calculated on a Shared Ownership home?

Rent on Shared Ownership is capped at 3% of the value of the share the landlord owns. So, if you own a 25% share in a £200,000 home and your landlord owns the remaining £150,000, the maximum rent you will be charged is £4,500 a year (£375 a month).

If you are buying a Shared Ownership resale (a second-hand home), you will be charged the same amount of rent as the previous owner was paying, for the initial period in which you become the property owner.

It’s also important to note that your rent will be subject to a review period (the terms of which will be outlined in your lease), so your rent may increase over time.

What do I need to budget for when buying a Shared Ownership home?

In addition to your deposit, mortgage, and rent, you will also need to finance a solicitor to represent you during the purchase process. This is known as conveyancing.

You may also need to put down a reservation fee to secure the property you wish to purchase. This is usually in the region of £500 and deducted from the total you pay upon completion.

It’s also important to factor in are maintenance and service charges. These are common with leasehold properties in Britain. If a service charge is payable, you will need to find the money to fund this each year, in addition to your mortgage and rent payments.

Finally, you may also be liable for stamp duty (a government tax) if the share price of your home exceeds the stamp duty threshold and you’re not a first time buyer (first time buyers are exempt from stamp duty).

How do I find Shared Ownership properties?

The quickest way is to Google Shared Ownership schemes in the city you want to live in and register your details.

Once you’re in a position to talk mortgages, that’s where we come in. We specialise in mortgage products for both new build homes and second hand property, and our advisers are contactable seven days a week.

To chat with one of our advisers, simply request a callback via our online appointment form.

For more information about Shared Ownership visit

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