Explaining Shared Ownership


If you’re having a tough time getting onto the property ladder, it may be worth exploring the option of shared ownership. In this article we’re going to run through what it is and whether it might be the right option for you.

What is shared ownership?

Shared ownership is where an individual buys a share between 25% - 75% of a property’s value, using a deposit and a mortgage, and then pays the rent on the remaining share.

These are leasehold properties, which mean you will own the lease on them for a fixed period of time – usually 99 years. You will have to pay a service charge for the property, which is typically charged on a monthly basis.

Am I eligible?

To be eligible for shared ownership, you need to have an income of less than £80,000 per annum if you live outside London and £90,000 if you live inside London. You also need to be at least one of:

  • A first time buyer
  • A previous homeowner who cannot afford to buy a new one
  • An existing shared owner looking to move

Advantages of shared ownership

  • It gets you onto the property ladder: the main selling point for this scheme is that it’s getting you one step closer to owning the entirety of a property.
  • You’ll be in a new build: shared ownership properties are usually modern buildings, which mean they are easier to maintain and built to a high specification. This is particularly helpful for a first time buyer as there are fewer building issues to deal with.
  • Better credit rating: despite the small temporary rating drop, over time, paying off a mortgage will have a positive effect on your credit rating.
  • Increased security: you won’t have a landlord who could suddenly end your tenancy, meaning you’d have to move out. Instead, you can choose to increase your share in your property whenever you like, putting your mind at rest knowing your dream home is already secured.

Does shared ownership sound like a viable option for you? Let us know your thoughts on Twitter @haart_uk!