What is Shared Ownership of Property?

Author:
Julia Khan
Associate Solicitor, Residential Conveyancing
Date:
29/01/2019

Shared Ownership doesn’t mean you share the ownership of the property or have to live with another person.

Shared Ownership simply means that you can purchase as much of the property as you can afford to and pay rent on the rest to a housing association or the owner of the property. So it’s quite different from joint ownership – when you buy a property with a partner, spouse or a friend.

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Eligibility for Shared Ownership Schemes

You’re eligible to purchase a home through a shared ownership scheme if:

      • Your joint household income is £80,000 or less (less than £90,000 in London)
      • You’re a first-time buyer or a previous homeowner who cannot afford to buy 100% of the property outright
      • You rent a council or housing association property.

You must also have the right to live permanently in the UK.

Advantages of Shared Ownership

Shared ownership enables buyers who can’t afford a mortgage on the full value of a property to get a step on the housing ladder. You can purchase a 25-75% share of the property value and pay rent on the remaining share. You can also purchase bigger shares as time goes on and your financial circumstances improve (also known as Staircasing).

Disadvantages of Shared Ownership

Shared ownership does come with a number of caveats that might be off-putting to some. For instance, buying up increased shares of your property can be expensive as it would be based on the property’s value at the time of purchase of the additional share. You may also have to pay additional maintenance charges and sub-letting or renting out the property won’t be permitted.

Furthermore, there will be restrictions on what you can do with the property.

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