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How shared ownership could get you onto the property ladder

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While shared ownership has been around for many years, its popularity has only started to grow in the last 12 months; a fact highlighted in a recent report released by Orbit and Chartered Institute of Housing.  Paul Winslade, Residential Conveyancing Partner, explains exactly what shared ownership is and how it is helping first time buyers to purchase their home.

What is shared ownership?

Buying a property through shared ownership essentially means that prospective buyers can buy a percentage of their home, between 25% and 75%, and then pay rent on the remainder of the property.  This is normally owned by a local housing association and the rent is calculated as up to 3% of the association’s share of the property’s value. 

“There are many different benefits with shared ownership; you need a relatively small deposit compared to if you were buying 100% of the property and as you are a tenant as well as an owner you do have certain tenants rights, such as landlord responsibility for any maintenance issues,” explains Paul.  “As with any property purchase of course, you will need to consider the other associated costs such as solicitor’s fees, stamp duty, and you must ensure that you will be able to afford the rent payments each month as well as your mortgage payments.”

With the popularity of the scheme there is also more competition, both in terms of property availability but also mortgage availability as only certain lenders offer the specialist mortgage that must be undertaken, something which is however on the increase.

Who can qualify for shared ownership?

In order to qualify for shared ownership, a buyer must have a household income of less than £80,000 outside of London, and £90,000 inside London.  “There are a number of other parameters,” continues Paul.  “You must either be a first time buyer, or if you are not, you must be able to show that you cannot afford to buy a home now; perhaps you’ve moved to a different area and cannot afford increased prices.  You can also purchase through the scheme if you are an existing shared owner.”

You are also not allowed to own another home either here in the UK or another country around the world, you must not be buying the property to rent it out, and you must be over 18 years old in order to apply for a mortgage. 

Shared Ownership 2.1 Report

The recent report from Orbit and CIH surveyed 2,200 adults through Ipsos Mori.  Of the people surveyed, shared ownership was one of the top ways to get onto the property ladder, with 34% of the participants being aware of the scheme.  This is compared to 32% who knew about right to buy and 28% who knew about the help to equity loan.

“As only 18% had not heard of shared ownership at all, this demonstrates the increase in popularity for the scheme over other options for first time buyers,” continues Paul.  “Further proof comes from the fact that during 2016, for the 8,000 shared ownership homes available there were 85,000 applications.  The report does go on to show that there is capacity to build more homes to meet the demand.”

Following original shared ownership research conducted two years ago, the government set aside £4.1billion to build 135,000 shared ownership homes, and since 2001 there have been 102,848 shared ownership homes built.  “Further research from My Home Move has shown that between a third and half of all shared ownership transactions take place in London and the South East, which is no surprise as these areas are amongst those with the highest property prices and deposit requirements in the UK,” explains Paul. 

The future for shared ownership

The CIH and National Housing Group are putting together final touches on a new charter, due to be published in March.  This is to improve the whole customer experience for buyers when they choose shared ownership housing.

Paul concludes, “Shared ownership offers a real alternative for those ready to buy their own home, but are stuck in a circle of not being able to afford to do so as their funds are being put into renting.  Some buyers may be put off as they want to own 100% of their own home, and this is an option for the future to buy more of the property as and when you can.  It’s a positive step for the property market and first time buyers, that shared ownership continues to be a priority for government.”

The Residential Conveyancing team at Warner Goodman has experience in managing shared ownership purchases and sales, and as they can be more complicated than a usual transaction, they can answer any questions you may have about the process.  You can contact the team to discuss this further by emailing, or contact one of the following phone numbers:

  • Fareham: 01329 222096
  • Portsmouth: 02392 776549
  • Southampton:  02380 717410


This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.