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Shared Ownership Mortgages

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SHARED OWNERSHIP MORTGAGES – Government-backed schemes

Shared ownership is a scheme backed by government and local authorities to help more people onto the housing ladder. You purchase a ‘share’ of the home with a deposit and mortgage, you then pay ‘rent’ on the percentage share you do not own. The shared aspect does not relate to sharing a home or buying with a party; it’s owning a percentage share of the property.

Are there eligibility requirements for Shared Ownership?

Normally yes, the eligibility requirements are set by the housing association or local authority that will continue to own the percentage of the share that you are renting. These schemes are normally limited to first time buyers and have maximum household income limits.

How much deposit do I require for shared ownership?

As a general rule you need a minimum of 5-10% of the share you are purchasing.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

What is a Shared-Ownership Mortgage?

Shared-ownership mortgages in the UK offer an affordable way to get on the property ladder, especially for first-time buyers or those with limited deposits. This government-backed scheme allows you to buy a share of a property, usually between 25% and 75%, while paying rent on the remaining share. Over time, you can purchase additional shares in the property, known as “staircasing,” to increase your ownership and reduce rent.

How Does Shared-Ownership Work?

In shared-ownership, you take out a mortgage for the share you’re buying, making this a more affordable entry point than traditional home buying. The remaining portion is owned by a housing association or developer, and you’ll pay rent on their share. As your circumstances improve, you can buy a larger share, eventually owning 100% of the property.

Benefits of Shared-Ownership Mortgages

  • Lower Deposits: Since you’re buying a share, your deposit is based on that share, making it more manageable.
  • Staircasing Flexibility: You can increase your ownership gradually, up to full ownership.
  • Accessibility: Shared ownership is designed for buyers who may not qualify for a full mortgage due to income or deposit constraints.

SHARED OWNERSHIP MORTGAGES – FAQs

Who qualifies for a shared-ownership mortgage?


Shared-ownership is typically available to first-time buyers, former homeowners who can’t afford to buy again, often housing associations also have maximum household earning limits which can vary between £60,000-£100,000 depending on the area.

How much of a deposit do I need?

Deposits for shared-ownership mortgages are often lower, generally between 5% and 10% of the share you’re purchasing, rather than the full property value.

Can I buy more shares over time?

Yes, staircasing allows you to purchase additional shares in increments, reducing your rental portion and potentially bringing you to full ownership.

What happens if I want to sell my share?

When selling, the housing association often has the right to find a buyer for your share first. This process, known as “right of first refusal,” ensures the property remains accessible to other shared-ownership buyers.

Are shared-ownership mortgages only for new-builds?

No, shared-ownership properties include new-builds and resale homes sold by previous shared-owners, providing a range of options.

Is shared-ownership a good investment?

Shared-ownership can be a good investment, especially for those looking to start small. However, consider factors like property market changes and the gradual increase in ownership costs.

What are the limitations on renting out a shared-ownership property?

Typically, subletting is restricted. Shared-ownership properties are designed for owner-occupiers, so renting them out is not allowed without permission from the housing association.

What additional costs should I be aware of?

Aside from your mortgage and rent, you may need to cover service charges, ground rent, and maintenance, especially in leasehold properties.

Reviews and Ratings for Financial adviser Miles Robinson, Swindon

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