Shared ownership scheme
Shared Ownership – also known as 'part buy, part rent' - is aimed at households who cannot afford to buy a property on the open market. Under the scheme, you can buy a share in a home and pay a regulated rent to the housing provider on the remaining share. The share may be as small as 10 per cent or as much as 75 per cent. You will probably also need to pay a service charge for maintenance of communal areas, buildings insurance and management costs.
How shared ownership works
Shared ownership buyers usually need to take out a mortgage to buy a share of a home. This means they need a deposit for the mortgage - usually at least 10 per cent of the value of the share they are buying. The size of the mortgage amount - and as a result - repayments are lower for buying the home outright.
Buyers also need to pay rent and, in most cases, service charges.
The initial rent is set at no more than 2.75 per cent of the value of the unsold share. Then providers can increase rent annually, in line with inflation.
Shared owners can buy more shares in their home when you can afford to, until they own the property outright. This is known as ‘staircasing’. Additional shares are based on the market value of your property at the time of staircasing.
Buying more shares will cut the amount of monthly rent you pay.
Who can apply
You are eligible for shared ownership if you:
- have a gross household income of no more than £90,000 a year
- are an existing shared owner
- do not already own a home or have sold your home before your purchase
- are unable to buy a property that suits your needs on the open market.
Check if you’re eligible to buy a home through shared ownership.
Housing providers will check that applicants are eligible and whether they can afford a shared ownership home. The Mayor also encourages boroughs and housing providers to prioritise key workers, as defined here, for shared ownership homes.
People with disabilities
You can apply for a scheme called Home Ownership for people with a Long-term Disability (HOLD), if available shared ownership homes do not meet your needs. This scheme enables buyers to buy a share of homes being sold on the open market on a shared ownership basis.
Shared ownership applicants should look for a suitable home on the open market and work with a housing provider to buy the property through shared ownership.
Older people
If you’re 55 or older, you can buy under the Older People’s Shared Ownership scheme.
You can buy a share of between 25 per cent and 75 per cent of a home. The difference is that, if you own 75 per cent of the home, you won’t have to pay rent on the remaining 25 per cent share.