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What is Shared Ownership?

Dec 19, 2024
Shared ownership, also known as ‘part rent, part buy’, is a government scheme that allows homebuyers to purchase a share of a home while paying rent to a housing association on the other share. This is typically between 10% and 75% of the home’s full market value.  
 
If you’re considering buying your home through shared ownership, our guide covers how it works, its pros and cons and other useful information. 
 

Shared ownership explained

Unsure whether shared ownership is right for you? In this guide, we’ll cover:
 
• How does shared ownership work?
• Who qualifies for shared ownership?
• What are the pros and cons of shared ownership?
• Is shared ownership only available on new build homes?
• How much deposit do I need for shared ownership properties?
• Can I rent out my shared ownership property?
• Can I sell my shared ownership property?
 

1. How does shared ownership work?

Shared ownership properties are always leaseholds, meaning you own the house but not the land it sits on. When you buy your new home through the scheme, you’re purchasing a share of it. You’ll only pay the mortgage on the part you own, so you can borrow less. 
 
The minimum initial share you can purchase is 10%, but you can increase it later through the ‘staircasing’ process until you own 75% of the property.
 
Your housing association will usually charge you 2.75% rent on their share.
 

2. Who qualifies for shared ownership?

To be eligible for shared ownership, you must:
 
• Be at least 18 years old
• Have an annual combined household income of less than £80,000 (£90,000 if you live in London) 
• Be a first-time buyer or unable to afford a property that suits your needs on the open market
• Prove that you’re not in mortgage or rent arrears
• Show a good credit history with no County Court Judgments (CCJs)
• Be able to afford your mortgage repayments and rent 
 

3. What are the pros and cons of shared ownership?

Some of the pros and cons of buying your new home through shared ownership include:
 Pros    Cons 
 You could buy your new home faster because of the smaller deposit and mortgage.    Shared ownership properties are leaseholds, meaning you won’t own the land they’re on.  
 You can increase the share as and when you can afford it.    You have to pay service charges and potentially ground rent.  
 It’s available for new builds, existing properties and flats.    If you want to sell, you may need to do so through the shared ownership scheme rather than on the open market.  
 It’s a great option if you have a lower income.  Buying more shares comes with extra costs.  
 

4. Is shared ownership only available on new build homes?

Shared ownership is available on new builds and resale homes.

5. How much deposit do I need for shared ownership properties? 

With shared ownership homes, your deposit needs to be at least 5% or 10% of the share you’re buying.  

For instance, if you're buying a 50% share of a property worth £400,000, a 10% minimum deposit would be equivalent to £20,000.

6. Can I rent out my shared ownership property?

If you buy a shared ownership property, you must live in it as an owner-occupier. 

 

7. Can I sell my shared ownership property?

You can sell your shared ownership home at any time, but you’ll need to let the housing association know first. They may decide to find a buyer before you advertise the property on the open market, known as the ‘nomination period’. This varies depending on the housing association and can range from four to eight weeks.  

 

Discover our brand-new, energy-efficient homes across the UK and our tailored schemes and offers that could help you become a homeowner. 
 
Call or visit our Sales Advisers today to learn more.
 
 

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