East village

How to buy your first home with shared ownership

31 July 2018

Shared ownership is a type of affordable housing where you buy part of a home and pay rent on the rest. It’s mostly aimed at first time buyers who can’t afford to buy on the open market. 

Here we clear up a few myths:

#1 I’m not eligible

You're eligible to buy a shared ownership home if you:

  • have a household income of no more than £90,000 a year
  • are a first-time buyer or do not currently own a home
  • can’t find a suitable property on the open market 

#2 It’s really expensive

Shared ownership can look expensive as homes are shown at their full value.

But you only have to buy the minimum share – generally 25%. This makes your mortgage and repayments much lower.

You’ll also need to pay 10% of the share you’re buying upfront.

#3 I have to share my home with a stranger

It might be called ‘shared’ ownership, but you don’t need to share your home with a stranger! It just means the housing provider owns the portion of the house that you don’t. 

#4 I’ll never own my home outright.

Once you become a ‘shared owner', you can buy additional shares of your home – a process known as ‘staircasing’. Buying more shares will reduce your monthly rent. 

You can keep doing this until you own your home outright – allowing you to buy your home as and when you can afford it. 

#4 Selling a shared ownership home is complicated. 

When you decide to sell, your housing provider has the first opportunity to find a buyer. If you own 100%, you can sell your home on the private market yourself. 

#5 Finding a shared ownership mortgage is difficult. 

You can get a shared ownership mortgage from mainstream banks including Barclays, Lloyds TSB, Halifax and Santander – or from a specialist lender. 

#6 It’s hard to find a shared ownership home.

The Homes for Londoners search tool helps you find shared ownership homes across London. Find out more at https://www.london.gov.uk/homes.