It’s official: London is one of the most expensive cities in the world to live in. According to the HM Land Registry, in May 2024, the average house price in London was £523,000 – 11.5 times higher than the average London salary of £44,370, based on the latest available data from the ONS. As a result, many first-time buyers are being priced out of the housing market in the capital, so they’re turning to alternative homebuying options, like Shared Ownership, instead. This government-backed scheme can provide a route to homeownership when traditional homebuying options, such as an outright sale, aren’t within someone’s budget.
How Does Shared Ownership Work?
At Newlon Living, we create Shared Ownership apartments across North and East London, providing homes for people who live and work locally. If you decide to pursue Shared Ownership with us, you’ll pay for the share you own with a mortgage and pay a subsidised rent to us on the share you don’t own.
If you’re a first-time buyer wanting to purchase a home in London, these are some reasons why Shared Ownership could be the right choice for you.
You’ll Typically Pay a Smaller Deposit
Shared Ownership homes typically require a lower deposit. This is because you pay a deposit based on the market value of the share you are buying. At Newlon Living, we require a 10% deposit on Shared Ownership homes. Minimum shares start at 25-30% depending on the development, but you can initially buy up to 75%.
For example, if you purchase a 25% share for a value of £90,000, you would need to pay a £9,000 deposit.
You Can Increase Your Share
When you purchase a Shared Ownership home, you always have the option to buy more shares until you reach 100%. This process is known as ‘staircasing’. If your financial circumstances change or your income increases, you can ‘staircase’ and purchase more shares in your home. The amount of rent you pay to us will be reduced in
proportion to the share you own. If you reach 100% of the shares, you’ll own your home outright and won’t pay any more rent.
With Shared Ownership, there is no obligation to buy more shares; it simply provides the option and flexibility to do so if you wish.
You’ll Have Your Own Space
Living in a home you don’t share with others, never mind owning your own home, can seem like an impossible feat at times. But Shared Ownership gives you a home to call your own and be the owner of it. You can say goodbye to sharing a house with flatmates once and for all. That’s why Shared Ownership can be the ideal path to homeownership if you’re a single first-time buyer seeking independent living.
It Provides a Permanent Home in the City
While you will still need to ensure that you pay your mortgage and rent on time and adhere to the terms of your lease, Shared Ownership puts you in a less vulnerable position than renting privately. According to City Hall, no-fault evictions in London rose by 52% in the 12 months leading up to the end of March 2024, demonstrating how precarious renting in the capital can be. On the other hand, Shared Ownership allows you to lay down permanent roots while investing in a share of your home. No more moving from rental to rental. Plus, you still have the option to move somewhere else in the future if you wish. You can learn more about Shared Ownership by reading our FAQs. Ready to buy your first home in London? Start your search for a Shared Ownership apartment, including new build and resale homes.