Shared schemes

Shared ownership schemes are aimed mainly at first time buyers as they can be seen as a viable option to making the transition from renting to buying.  In essence, you own a share of the property and then rent the part you don’t own at a reduced rate.  

Here, we explain this scheme, as well as review other purchase options for you.

How shared ownership works

With shared ownership, you buy between a quarter and three-quarters of a property with the option to buy a bigger share in the property at a later date.  Aimed at those who don’t earn enough to buy a home outright, most of the homes available are newly built, but some are properties being re-sold by housing associations. All shared ownership homes in England are offered on a leasehold only basis.

Who can apply for shared ownership?

There are certain requirements if you wish to apply for shared ownership, including the following if you are based In England:

  • First-time buyers or those who used to own a home but can’t afford one now
  • People whose combined household income is less than £80,000 (in London, it’s less than £90,000)
  • You rent a council or housing association property.
  • You don’t have to be a key worker, such as a nurse or teacher, to apply for shared ownership.

In order to apply, you will need a mortgage to pay for your share, which can be between a quarter and three-quarters of the home’s full value.  You then pay a reduced rent on the share you don’t own and can choose to buy a bigger share in the property up to 100% of its value at a later stage.

If you’re aged 55 or over, you can get help from another home ownership scheme called ‘Older People’s Shared Ownership’.

This scheme is similar to a normal shared ownership scheme but it only lets you buy up to 75% of your home.  Once you own 75%, you won’t have to pay rent on the remaining share.

If you have a long-term disability and cannot find a suitable home for your needs, you can get help with the ‘Home Ownership for People with long-term Disabilities (HOLD)’ scheme.

While we do not act for people on these schemes, you can get more information on these two schemes from your local Help to Buy Agent.

What are the benefits of shared ownership?

Shared ownership means that owning a home is more accessible to those from lower-income households and there is always an option to increase your share of the ownership of the home over time.  For lower-income households, renting is sometimes the only option but in some situations shared ownership will be more cost effective than renting, and the rent that you pay to the landlord who owns the other part of the property will be lower than market rates.

Why shouldn't I choose shared ownership?

While shared ownership does come with benefits there are some restrictions to this way of owning your own home.  The most obvious being that you don’t own the property outright and it is likely you will be restricted to certain developments.  As indicated above, while you only pay rent for the portion of the property that the landlord owns, you will have to pay for maintenance costs for the whole of the property.  If you do improve your situation and you wish to buy more shares in the property there will be valuation fees, or if you wish to move completely there is a limited housing market for shared ownership properties, so there may be a delay.

What is the application process for shared ownership?

If you would like to find out more about shared ownership, the first step is to speak to the housing team in your local council, or housing association, to see whether the scheme is available in your area and whether you’re eligible to apply.  There are certain websites you can view to see the properties that are available in England, such as Share to Buy, or Homes for Londoners if you live in London.

The next step would be to find out if you can get a mortgage.  Not all lenders will give you a mortgage for shared ownership but many of the major ones will do so.  You will still have to apply for a mortgage to pay for your share, and will have to undergo strict affordability checks by the lender and you will also be expected to be able to provide a deposit.

As well as these costs, there are other financial commitments you will need to make and you must ensure you will be able to afford all the costs of home ownership; including mortgage fees, moving costs, stamp duty*, insurance, repairs, maintenance and, if it’s a flat in a block, your service charge. Remember for shared ownership, although you own only a share of the property you still have to pay all of the maintenance costs.

*As of 29th October 2018, stamp duty is no longer payable for first time buyers purchasing through shared ownership if their property is valued up to £500,000.  


Other housing schemes

There are a number of other government-backed schemes to help potential or existing homeowners including:

Help to Buy Scheme

This is a government scheme, currently available until 2021, offering an equity loan to first-time buyers and existing homeowners who want to buy a ‘new build’ house with a purchase price of no more than £600,000.  Under this scheme, you can borrow 20% of the purchase price interest-free for the first five years as long as you have at least a 5% deposit.  If you live in London, you can borrow up to 40% of the purchase price.  

It is important to note that you can’t use Help to Buy schemes to buy a second home or a property to rent out, and you can only take out a repayment mortgage, which can be limiting. 

While there are a wider range of properties available for shared equity schemes compared to shared ownership, it is only new builds that are open to Help to Buy Equity Loans.   When the property is sold you must pay back the equivalent uprated equity share, and this will be based on the value of the property at the time of sale.  If the value has increased since purchase, this could be an expensive payment to make.

The Help to Buy Equity Loan will be changing on 1st April 2021.  From this date, the scheme will only be open to first time buyers.

Right to Buy/Acquire

This is a scheme offered in England and Wales for housing association tenants who don’t qualify for Help to Buy.  It is for tenants in England, Wales and Northern Ireland who rent their home from their local council, allowing tenants who qualify to buy their home at a discount.

The size of the discount varies depending on where you live and the type of property you want to buy.  Usually, tenants must have rented from the public sector (i.e. local council or housing association) for three years before they can buy under these schemes.  The three years can be non-consecutive, so you could still qualify if you rented from the private sector between the times when you rented from the public sector.

Starter Home Scheme

The Starter Home scheme is a new government plan, where 200,000 new build homes are available to first-time buyers under 40 years old with at least 20% off the market price.

The discounted price for these homes should be priced no more than £250,000 outside London, and £450,000 in London. Visit here for more information.


There are many pros and cons to both these options, and your personal circumstance will determine which solution is right for you.  We can help discuss this with you and find the right path for you.

You can discuss your next move with our teams by contacting us on the phone numbers below, or to find out more about our fees you can use our estimate calculator.

Fareham: 01329 288121
Southampton: 023 8063 9311
Portsmouth:  023 9275 3575
Chandler’s Ford: 023 8071 7467
Waterlooville: 023 9277 6569

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