Shared ownership housing schemes explained

Shared ownership schemes are a cross between buying and renting; aimed mainly at first-time buyers. You own a share and then rent the part you don’t own at a reduced rate. Read on to find out how they work and how to apply.

How shared ownership works

With shared ownership, you buy between a quarter and three-quarters of a property.

You have the option to buy a bigger share in the property at a later date.

These schemes are aimed at people who don’t earn enough to buy a home outright.

Most of the homes available are newly built, but some are properties being re-sold by housing associations.

All shared ownership homes in England are offered on a leasehold only basis.

Each country runs their shared ownership scheme slightly differently - see the links below for more information:

How much can you afford to borrow

Affordability calculator

Who can apply for Shared Ownership?

The criteria for who’s eligible for the shared ownership scheme varies from country to country.

From April 2021, changes to the scheme were introduced under the government’s new ‘Affordable Homes Programme which include:

  • The minimum initial share has to be reduced from 25 to 10% percent.
  • You must now be a first-time buyer with an annual household income less than £80,000, down from £90,000 in London.
  • Homeowners can now purchase additional shares in 1% percent instalments, down from 5 or 10% percent.
  • Fees for buying additional shares now been reduced.
  • Landlords will pay the costs of repairs and maintenance for the first 10 years of ownership.
  • The rules on selling the property have changed.

You don’t have to be a key worker, such as a nurse or teacher, to apply for shared ownership.

But military personnel will be given priority over other applicants.

If you’re aged 55 or over, you can get help from another home ownership scheme called ‘Older People’s Shared Ownership’.

This scheme is similar to a normal shared ownership scheme but it only lets you buy up to 75% of your home.

Once you own 75%, you won’t have to pay rent on the remaining share.

If you have a long-term disability and cannot find a suitable home for your needs, you can get help with the ‘Home Ownership for People with long-term Disabilities (HOLD)’ scheme.

You can get more information on these two schemes from your local Help to Buy agent.

What’s the application process?

  • Speak to the Housing team in your local council, or housing association, to see whether the scheme is available in your area and whether you’re eligible to apply.
  • You don’t have to live in a council owned home to be eligible. Look on the Share to Buy website to see what properties are available in England, or Homes for Londonersopens in new window if you live in London.
  • Find out if you can get a mortgage. Not all lenders will give you a mortgage for shared ownership but many of the major ones will do so. You will still have to apply for a mortgage to pay for your share, and will have to undergo strict affordability checks by the lender. You will also be expected to be able to provide a deposit.
  • Make sure you will be able to afford all the costs of home ownership; including mortgage fees, moving costs, Stamp Duty, insurance, repairs, maintenance and, if it’s a flat in a block, your service charge. Remember for Shared Ownership, although you own only a share of the property you still have to pay all of the maintenance costs.
Read our guide to find out more on Mortgage fees and costs.

Other housing schemes

There are a number of other government-backed schemes to help homeowners including:

  • Help to Buy
  • Shared equity
  • Right to Buy

It is important to note Shared Ownership and Help to Buy Shared Equity schemes are different.

With shared ownership, you only own a part of the property with an option to buy more.

With Shared Equity, you own all of the property from the start but have to repay a proportion of its value when you sell it – equivalent to the proportion of government equity you took to buy it.

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