Shared Ownership Mortgages - everything you need to know

Part-buy, part-rent means you initially buy a share of the property, perhaps 25%, 40% or more, and then you pay rent to the housing association on the part you do not own. Significantly, this rent may be lower than rent you would expect to pay for private rental property of similar quality. And no, you do not share the ownership with strangers, you simply buy your share from the housing association running the scheme and you pay your rent to them as well.

Shared Ownership schemes offer properties starting at one-quarter (25%) ownership, up to three-quarters (75%). However, you may be able to “staircase” and purchase a bigger share of the property at a later date when you are ready. In most cases, this will include the opportunity to purchase 100% of the property.

It is important to note that when staircasing, the extra share you buy will need to be valued at that given time. Therefore if the value of your home increased, you would have to pay the inflated cost for your additional share.

In the vast majority of cases, Shared Ownership schemes are for newly built homes which typically form part of larger developments of houses and flats. However, from time to time, housing associations will also advertise existing Shared Ownership properties for resale when the previous owner wishes to move on.

Find out more on how to buy a Shared Ownership property.

You can usually apply to buy a property with one bedroom more than you need. For example, a single person or couple could buy a two bedroom Shared Ownership property.

However, in most cases you won't be able to sub-let a spare room under a Shared Ownership scheme. Each housing association (and your mortgage provider) will have rules about lodgers and sub-tenants, which you'll need to follow.

All Shared Ownership properties in England are leasehold. If you staircase to 100% ownership, your lease will remain the same, but the Shared Ownership provision will end - meaning you'll no longer pay rent.

Yes, if you previously owned a house but you can no longer afford to buy one outright, you may still be eligible for Shared Ownership. See the eligibility section above for more details.

Yes, you don't need to be a key worker to apply for Shared Ownership. Anyone who meets the eligibility criteria can apply, although some schemes may prioritise certain groups. Each application will be looked at under a number of specific criteria and priority will be given depending on the immediate housing needs of the applicants.

You don't need to live in a specific area to apply for a specific property, but preference may be given to applicants who have significant ties to the area. Speak to representatives of the housing scheme advertising the property to find out how they will be assessing the applications.

You will need to let the Housing Association know that you are looking to sell your home, depending on the terms of the lease, the housing association will have a time period in which they need to find a buyer. If after this time they are unable to find a suitable buyer, you would need to decide whether to carry on marketing with them or if you will find an estate agent to act on your behalf, however you will need to pay the fees.

If you want to stay in your Shared Ownership home but you’ve come to the end of your mortgage deal, you have the option to either remain with your current mortgage provider or to switch to a new one. Switching could perhaps get you a better deal or enable you to staircase by borrowing more. For more information on remortgaging, see our guide.