Shared ownership scheme
Shared Ownership – also known as 'part buy, part rent' - is aimed at first time buyers who cannot afford to buy a property on the open market. Under the scheme you can buy at least a 25 per cent share in a home and pay a regulated rent to the freeholder on the remaining share.
How shared ownership works
Shared ownership buyers need household incomes that let them afford to pay between 25 per cent and 75 per cent of the full market value of the property. They’re also expected to have a 10 per cent mortgage deposit for the share to be purchased. Mortgage amount and repayments are then lower than buying a property on the open market.
The rent on the unsold share is capped at 2.75 per cent of its value when the first share is sold. You can buy more shares in the property when you can afford to until you 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.
If your property is in an estate with common areas, you will pay a service charge for maintenance and upkeep of these areas and the grounds of your building.
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.
People with disabilities
You can apply for a home through a scheme called Home Ownership for people with Long-term Disability (HOLD), if available shared ownership properties do not meet your needs.
Shared ownership applicants should look for a more suitable property 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 still buy between 25 per cent and 75 per cent of a shared ownership property - the difference is you can only buy up to 75 per cent but once you hit that share, you won’t have to pay rent on the remaining 25 per cent.