Top 10 Shared Ownership FAQs

As the UK’s leading first time buyer property portal, Share to Buy is a one stop shop for potential purchasers who are looking to buy a home through Shared Ownership.

We regularly receive questions about the part-buy part-rent scheme from budding buyers who want to learn more about their options – from deposits and resales, to leasehold homes and the government’s new Shared Ownership model.

As a partner of Shared Ownership Week, we’ve answered 10 of the most frequently asked questions to help you on your home-buying journey!

1. How does Shared Ownership work?

Shared Ownership is an alternative to renting and full ownership, giving eligible buyers the opportunity to purchase a share in a new build or resale property.

The purchaser pays a mortgage on the portion they own, and rent to a housing association on the remainder. Because the purchaser only needs a mortgage for the share they are purchasing, the amount of money required for a deposit is usually a lot lower when compared to that required when purchasing outright.

2. What is the deposit on a Shared Ownership home?

One of the biggest positives about buying a Shared Ownership home is that the deposits are usually much smaller than buying on the open market. Generally, you’ll only need to raise a deposit of around 5-10% of the share that you’re purchasing, not of the full value of the property.

As an example, if you want to buy a 25% share of a home that costs £500,000 – with your share equating to £125,000 – that’s a minimum 5% deposit of just £6,250, or £12,500 for 10%.

3. Is part-buy part-rent only available to first time buyers?

Due to the lower deposits, Shared Ownership is often popular with first time buyers who are looking to take that first step onto the property ladder but it’s actually available to all different types of purchasers including second steppers, upsizers and downsizers.

As long as you meet the necessary eligibility criteria – such as being over the age of 18 and having a household income of under £90,000 in London, or under £80,000 outside of the capital – then Shared Ownership could still be an option for you!

4. Will I be able to get a mortgage?

There are more and more lenders offering Shared Ownership mortgage options all the time! However, it’s worth noting that all mortgage lending is calculated in pretty much the same way so regardless of whether you’re buying through Shared Ownership or on the open market, it all comes down to your income, outgoings, credit rating and the size of your deposit.

You can find out more about the process on Share to Buy’s Mortgage Hub, however we would also recommend speaking with a financial advisor or mortgage broker to discuss your options.  

5. Will I need to pay Stamp Duty?

It’s important to note that regardless of tenure, if you’re a first time buyer and the value of the property is under £300,000, you’ll pay zero Stamp Duty Land Tax (SDLT). If the home is worth between £300,001 and £500,000, you’ll only pay 5% on that portion.

Generally speaking, when buying through Shared Ownership, you will have two options; you can either pay SDLT on the full value of the property as if you were buying outright, or you can choose to only pay SDLT on the share that you are purchasing. If you choose the second option, you will not be liable to pay any more SDLT until you purchase an 80% share of your home or higher via the staircasing process.

6. Will I have to share my home with a stranger?

This is a common misconception but you don’t have to buy or share your home with anyone that you don’t want to! The term ‘shared’ in Shared Ownership actually refers to the fact that you’re sharing ownership with the relevant housing association.

This means that whether you’re looking to buy a family home with your partner, a pad with your best pal or an apartment all to yourself – you can do it all through Shared Ownership.

7. Can I buy more shares or sell my home?

You can choose to buy more shares in your home through a process known as staircasing; in most cases, you can go on to buy 100% of your property and become the outright owner, meaning that you no longer need to pay any rent.

For owners who would prefer to sell their home, they can do so at any point. As outlined in the terms of your lease, your housing provider will often have a set period of time (usually around eight weeks) to try and sell the home on your behalf. If they don’t manage to sell it within this time, you’ll be able to advertise the property yourself, selling privately or through an estate agent of your choice.

8. Who is responsible for repairs?

As part of the existing Shared Ownership scheme, the housing provider or manager will generally be responsible for any communal parts of the building and grounds, while you will be responsible for all repairs and maintenance to your own flat. You pay a service charge to the housing provider which is used to cover the costs of maintenance and decoration to communal areas.

However, as part of an updated Shared Ownership model, there has been the introduction of a 10-year repair warranty during which the shared owner will receive support from their housing provider/landlord to pay for essential repairs. This will be applicable on new build homes available through the government’s Affordable Homes Programme.

9. Will my home be leasehold or freehold?

Shared Ownership properties are sold on a leasehold basis which acts as a long tenancy. Your lease will give you the right to occupy and use the home for a longer period – or the ‘term’ of the lease – and the home can be bought or sold during that time.

All apartments, regardless of tenure, are sold on a leasehold basis. However, if you purchase a Shared Ownership house and go on to buy 100% through the staircasing process, you may be able to buy the freehold from the housing association.

10. How does the new Shared Ownership model work?

Back in 2021, the government announced their new Affordable Homes Programme which included the introduction of a new Shared Ownership model. As part of the new programme, changes to the scheme included minimum initial shares being reduced from 25% to 10%, the introduction of 1% gradual staircasing and owners having more control over the resale process.

The new part-buy part-rent model will be implemented on all new build Shared Ownership properties delivered through the Affordable Homes Programme for five years from April 2021, with some homes being available through the new model in 2022. 

Interested in finding out more about Shared Ownership? Share to Buy will be hosting the London Home Show Autumn 2023 during Shared Ownership Week on Saturday 23rd September, 10am to 5pm.

Taking place at the QEII Centre in Westminster, this exhibition is the country’s largest first time buyer event and is completely free to attend. Register for your free tickets today!