Shared ownership – considering if it’s right for you

Guest blog from Oriel

First time buyers who want to get on the property ladder but may not have access to the required funds, have the option of a scheme known as ‘Shared Ownership’. It’s actually been around for about 30 years but has been prioritised by the government and social landlords. So if you’re looking at Shared Ownership as an option to buy your own home, here’s what you need to know:

In a nutshell…

Shared Ownership is part owning your home when you buy a share of it (typically 25%-75% of the property) and then rent the remaining part from a housing association. You have the option to buy the remaining shares and ultimately own your own home. There are different types of shared ownership schemes depending on which housing association you decide to use.

Here’s a few points you need to be aware of:  

What’s so good about it?

  • It’s within more people's to enter the property market and work towards owning their own home
  • Deposits can be as low as 5% and mortgages can be as low as 25% of the purchase price
  • You can buy more shares when you can afford them
  • It’s generally more affordable than renting or paying a complete mortgage
  • You can sell your share in the property at any point
  • If your share is lower than the stamp duty threshold, there is no stamp duty charge
  • Shared ownership may not be available in the area you would like to live
  • You may not meet the criteria set to be given the option of buying a shared ownership home or if you do, there may be a waiting list
  • The cost of buying additional shares depends how much your home is worth at the time you want to buy and not at the value at the time you bought the house
  • If you want to sell and own less than 100% of your home, the housing association has the right to find a buyer for it. If you own 100%, then the housing association has the right of first refusal to buy back your home
  • There are fees to pay which may include conveyancing, mortgage arrangement fees, valuation surveys, a deposit and arrangement fees for the rental agreement
  • You will be responsible for repairs and maintenance on your home and there may be a service charge for communal areas.

What you need to be aware of:

  • Shared ownership may not be available in the area you would like to live
  • You may not meet the criteria set to be given the option of buying a shared ownership home or if you do, there may be a waiting list
  • The cost of buying additional shares depends how much your home is worth at the time you want to buy and not at the value at the time you bought the house
  • If you want to sell and own less than 100% of your home, the housing association has the right to find a buyer for it. If you own 100%, then the housing association has the right of first refusal to buy back your home
  • There are fees to pay which may include conveyancing, mortgage arrangement fees, valuation surveys, a deposit and arrangement fees for the rental agreement
  • You will be responsible for repairs and maintenance on your home and there may be a service charge for communal areas.

Shared Ownership is only one way you can get on the property ladder that you can consider.  However, it certainly appears to be more accessible and affordable to people who previously had extremely limited prospects of owning their own home. 

Find out more