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10 Common Questions About Shared Ownership

Posted 13 August 2022

We advise home seekers on some of the most frequent questions about buying with Shared Ownership...

Shared Ownership is a great way of getting on the property ladder and while there are some simple qualifying conditions [link], there may be other questions you have about whether you can apply for the scheme.

Here are 10 of the most common questions asked about using the Shared Ownership scheme:

What are the pros and cons of Shared Ownership?

The advantages of Shared Ownership include:

  • It could take you forever to save enough and earn enough to buy 100% of a property, so it’s a good way to get onto the property ladder.
  • You can buy more shares later on (‘staircasing’) if you want to, as and when you can afford it.
  • It may be cheaper than renting, especially if you want to enjoy the benefits of living in a brand new home. [link]
  • You can sell your Shared Ownership property at any time.

The disadvantages of Shared Ownership include:

  • Whatever share of the home you have purchased, you'll have to pay 100% of the service charge.
  • It may be difficult to buy further shares (‘staircasing’) at a later date because if the value of the property increases, so will the cost of the additional share.
  • Staircasing has costly administrative costs.
  • It can sometimes be tricky to get a Shared Ownership mortgage.
  • While Shared Ownership homes are built in a real variety of locations, you don’t have the freedom of choice that you do when seeking a property on the open market.

What Shared Ownership property can I afford?

This is all down to individual assessment of income and expenditure. If there are two of you buying, this will be assessed for each of you and combined.

Calculator and houseCan I buy through Shared Ownership if I am on benefits?

If you have the cash with which to buy your share, then the housing association should be able to accept your benefits as a suitable way to pay for the rent.

If you’ll need a mortgage, it will be down to lender, and it’s almost certain that they all require the applicant to be employed. They can include the benefit income when they calculate affordability, but they won’t accept it as the only form of income.

I am over 55-years-old – am I eligible for Shared Ownership?

Older Persons Shared Ownership (OPSO) is the scheme available for people aged 55 or over. The qualifying criteria are very much the same as the mainstream Shared Ownership scheme but the one big difference is that with OPSO, the maximum share that you can buy is normally 75%, rather than the usual 100%. However, on the majority of OPSO homes, once the purchaser has reached 75%, there is no rent payable on the remaining 25% share.

Can I buy 100% of the home?

You can’t buy 100% of the new home right from the start. You’ll begin with a share somewhere between 25% and 75% of the full market price, but if, over time, your savings and earnings increase and you can afford a greater share, you can buy more (‘staircasing’) up to 100%.

How is the rent part of Shared Ownership calculated?

Each housing association decides their annual rent rate for the year, but it would typically not exceed 3%.

Here’s an example:

You’ve paid £90,000 for a 30% share of a property with a full market value of £300,000. The remainder still owned by the housing association is 70%, or £210,000. If they charge rent at 3% per annum, that equates to £6,300 over the year, or £525 per month. You’ll also be paying off your monthly mortgage payments and any service charges.

Where do I get a Shared Ownership mortgage?

There are very few mortgage lenders in the Shared Ownership market. Three names are Leeds Building, Newbury Building Society and Suffolk Building Society. Like borrowers on other mortgages, you’ll be asked details of your income and expenses. Their calculations will involve what your rent, service charge and any ground rent which you must pay for.

DoorkeysCould I rent out a room to a lodger?

Generally speaking, yes you can, but each housing association may have particular terms and conditions you’ll have to stick to. These are typically:

  • You must inform them that you are taking in a lodger.
  • You don’t move out of the home.
  • Your lodger isn’t given exclusive use of any part of the home except their bedroom (someone who has this is called a subtenant).
  • You don’t charge a lodger more than the rental element.

Where do I apply for Shared Ownership?

The first step in applying for Shared Ownership is to find your local Help to Buy agent, which can currently be done on the government's Help to Buy website. That agent will then tell you which information and details you’ll need to provide, including savings, earnings and credit history. It will only take a few days to hear if this is approved and if it is, you can formally start searching for a home.

When you’ve found the Shared Ownership home you want, you’ll be given a detailed financial assessment for the housing association that owns the property. You will usually be required to produce proof of ID, three months of payslips and bank statements, details about savings, current debts and credit arrangements, as well as any benefits you receive.

Are there any alternatives to Shared Ownership?

Shared Ownership is a well-known and long-established method of getting onto the property ladder which is operated through housing associations and their subsidiaries. If you can’t afford 100% of a new home, there’s the Home Reach scheme run by housing provider heylo across England in partnership with many private housebuilders. This usually starts with the buyer owning 50% of the new build property and paying a subsidised rent on the rest.

Some housebuilders work with local authorities to offer new homes at a discounted price, say 70% of the full market price. The buyer has the benefits and freedoms of full ownership but will always have just that share (no staircasing), so when they sell it, they will only get back 70% of the sale price. The government’s First Homes scheme, only introduced in 2021, works in the same fashion.


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