What is Shared Ownership?

Shared ownership is a government-backed scheme offered by housing associations which allows you to part-buy and part-rent your home. Read our simple Q&As all about shared ownership.

If you can’t quite afford the mortgage on 100% of a home, you can buy a percentage share of your chosen property (typically between 25% and 75%) and then rent the part that you don’t own from a housing association. The level of rent payable monthly will be set by the housing association depending upon the percentage of the property owned. 

CAN I BUY A LARGER SHARE OF MY HOME AT A LATER DATE? 

Yes. This process is known as staircasing – it allows you to buy a larger share of your home from the housing association as and when you can afford it. How much you pay for your new share will depend on the value of your home at the time; the housing association will value the property to determine this. You can increase your ownership of your home up to 100%, however, reference must be had to your lease as some schemes for elderly and disabled persons limit the percentage that you can purchase to 75%.

HOW DO I SELL MY HOME? 

​Generally speaking, you must notify the housing association if you wish to sell your home. If you do not own 100% of your home, the housing association will have a right to ‘first refusal’. This means that they can choose to buy the property back before you sell it to anyone else. The housing association can also choose to find its own buyer for you from one of its waiting lists.

WHAT ARE THE ADVANTAGES OF SHARED OWNERSHIP? 

Providing you meet the eligibility criteria set by the housing association, shared ownership schemes can be an excellent way to get onto the property ladder; you may also find that you can buy a bigger home than you would have otherwise been able to afford.

WHAT ARE THE DISADVANTAGES OF SHARED OWNERSHIP? 

When you come to sell your property, you could find that your hands are tied when it comes to who can buy your home, making it more difficult to get a quick sale. As mentioned previously, the housing association will have ‘first refusal’ on your property once on the market. They may decide to either purchase it back from you or offer it to one of their buyers on a specified waiting list. The wait for you as a seller may be longer than anticipated. In addition to this, as you won’t own the property outright, you will have to seek permission from the housing association should you want to make certain home improvements such as redecorating or extending the property.

DO ALL LENDERS OFFER SHARED OWNERSHIP MORTGAGES? 

​No. Speak to your chosen lender or mortgage broker to find out more.

ARE THERE OTHER SCHEMES AVAILABLE? 

​There are a number of other government-backed schemes available including Help to Buy, Shared Equity and Right to Buy – however, these are not shared ownership schemes and different rules and procedures apply.

MORE INFORMATION 

​If you looking to purchase a property as part of a shared ownership scheme or similar, Pinney Talfourd can assist. We have an experienced and dedicated team of specialist residential property lawyers based in our offices across Essex and London.

We have late night and Saturday appointments available in our offices in Brentwood, Hornchurch, Upminster, Leigh-On-Sea and Canary Wharf for those that find it difficult to make appointments during working hours.

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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.