Skip to content

About Shared Ownership

Shared ownership is the affordable way to buy a new home. You can buy a share of a home that you can afford, with an initial share between 10 – 75%, you will then pay rent on the share that you don’t own. In the future, if your circumstances change or if you’re in the position to do so, you can buy more shares or purchase the property in full. Because you’re buying a share in a property, rather than buying it outright, this means that you’ll need a smaller deposit and mortgage. This makes shared ownership an affordable route into home ownership. 

Buying a larger share is called ‘staircasing’ and as you buy more shares, you pay less rent. In some instances, you will have to live in your home for a year before you can buy more shares and in rural areas, stair-casing can sometimes be restricted. You will have the option to buy 1% extra share each year for up to 15 years after your initial purchase. The 1% price you can purchase is based on the initial value, with an increase linked to the Retail Price Index (RPI) – there are no legal fees attached to the 1% purchase price. 

You can read our Guide to Staircasing here.

You will need to take out a mortgage to pay for your share of the home’s purchase price, or fund this through your savings. Shared Ownership Homes are always leasehold, however after the final staircasing, the freehold will be transferred to you. 

Shared Owners have the benefit of a 10 year ‘initial repair period’ during which you will be able to claim costs of up to £500 a year from your landlord to help with essential repairs. During this period the landlord is also responsible for the cost of essential repairs to the external fabric of the building and structural internal repairs. These are limited to repairs not covered by the building warranty, defects period or any other guarantees. The £500 allowance can also be used to claim back excess paid when claiming through the building warranty. For more information on repairs please click here.

 

What does leasehold mean?

As a Shared Owner you buy a lease (becoming a leaseholder) that gives you the right to occupy and own a percentage of a property for a given period of time (typically 990 years). 

You have the right to occupy the property provided that the agreed rent and service charges are paid as set out in the terms of the lease and all other terms specified in the lease are adhered to. 

When you buy your ‘share’ of a Shared Ownership property you are buying a lease based on that percentage of the market value of the property. You are not buying a share of the freehold. You would only acquire the freehold interest in the property if you could and chose to ‘staircase’ to 100% ownership. There are some properties that cannot be staircased up to 100% and owned outright and this will be stipulated in the Lease. 

A leaseholder in a Shared Ownership property will also pay rent to the Association based on the percentage of the market value of the property not covered by the lease. For example, if you buy a lease based on 50% of the market value, you will pay rent based on the other 50% that remains in the Associations ownership. 

If you ‘staircase’ and buy 100% share of a house the freehold will be transferred on completion, provided the Association owns the freehold. The Association would then have no further legal interest in the property. You will no longer need to pay rent to us although we may levy a service charge for services we provide to external communal areas that benefit property, such as grounds maintenance of the estate. You would also need to source and pay for your own building’s insurance. 

Leases can be bought and sold on the open market. If you sell your ‘share’ of the property you are selling your interest in the lease. A purchaser may buy your ‘share’ and the Associations ‘share’ at the same time. This is called back to back staircasing. 

 

Am I eligible?

You can buy a home through shared ownership if all of the following are true:

  • your household earns £80,000 a year or less 
  • you cannot afford all of the deposit and mortgage payments for a home that meets your needs 
  • you are over the age of 18 and living in the UK
  • you are a British or EU/EEA citizen with a settled status or have indefinite leave to remain in the UK

One of the following must also be true: 

  • you’re a first-time buyer 
  • you used to own a home but cannot afford to buy one now 
  • you’re forming a new household – for example, after a relationship breakdown 
  • you’re an existing shared owner, and you want to move 
  • you own a home and want to move but cannot afford a new home that meets your needs 

For some homes, you may have to show that you live in, work in, or have a connection to the area where you want to buy the home. 
 
Military personnel will be given priority over other groups through government funded shared ownership schemes.  

Applicants for Older Persons Shared Ownership must be over 55 year olds. 

If you are applying jointly with another person to buy a home, all parties must meet these eligibility criteria, and the assessment of affordability will be based on the financial circumstances of both. 

If you are applying as a sole applicant, only you would need to meet this criteria but the gross household income of all your household will be considered and will need to be under the £80,000 threshold. 

Homes are offered on a first come first served basis. For more details, click here.

If you own your own home 

To be able to progress with the purchase of a shared ownership home, you must have: 

  • formally accepted an offer for the sale of your current home (called ‘sold subject to contract’ or ‘STC’)
  • written confirmation of the sale agreed (called a ‘memorandum of sale’) including the price and your intention to sell 

You must have completed the sale of your home on or before the date you complete buying your shared ownership home. 

 

How much will it cost?

All purchases must be affordable and sustainable. In order to qualify for a shared ownership home, you will need to show that you can afford: 

  • the mortgage repayments; and
  • the monthly rent on the share of the property you don’t own; and
  • any service charge and/or management fee for the services you receive

Unless you are a cash buyer, you will also need to provide a deposit for the property in order to get a mortgage. This will depend on your individual circumstances but will usually be 5% or 10% of the share in the home that you are buying. 100% mortgages are not accepted. For example, for a property valued at £200,000 in which you are buying a 50% share, you will need a deposit of £5,000 or £10,000.

During the sales process, you will also need to pay for: 

  • Reservation fee to hold the property
  • Mortgage valuation and survey
  • Financial Assessment
  • Legal fees and searches
  • Moving costs 

Please click for full details of our Affordability and Surplus Income Policy and our Cash Buyer Policy.

 

How do I apply?

If you have got your deposit, done the maths to work out that you can afford a Shared Ownership Property, and found a property that you are interested in, you can get in touch with our sales and marketing team who will happily answer any questions you may have. They will also explain the process in more detail and provide up-to-date information on homes or plots that are available and when the property may be ready to move into. 

Once you are happy that you have found the right property, you will need to complete an application which includes a financial assessment, this will be completed by Metro Finance appointed on our behalf. 

Metro Finance will request the following information: 

  • Identification – valid Passport or Driving licence at current address.
  • Proof of address – Latest utility bill, Bank or credit card statement (dated in the last 3 months), council tax letter (dated last 12 months), Driving licence if not used for ID already.
  • Proof of income
    • Employed – Latest 3 months payslips
    • Self employed – Latest 2 years tax calculations and overviews
  • Latest 3 months bank statements for all accounts held
  • Proof of deposit
    • Savings – latest 6 months statements showing a build up of funds
    • Gifted deposit – latest bank statement showing funds available and signed gifted deposit letter
  • Agreement in principle

Note: Further or different documents may be required dependent on source of deposit. If using Metro Finance for the mortgage further documents may be required for our internal and lender compliance.

 

What happens next?

Reserving your dream home 

Once your financial assessment has been approved, you will be able to reserve your home. You will need to pay a deposit of £500 which is deducted from the total purchase price on legal completion and sign and return our reservation checklist. 

Once you have reserved a property, this will be taken off the market. 

Mortgage and legal advice 

If you need to obtain a mortgage to buy your home you will need to speak to an Independent Financial Advisor (IFA), bank or building society. To buy a home, you will need to appoint a solicitor to act on your behalf. 

There are now 27 active SO lenders with 15 offering up to 95% lending. 

The solicitor will handle the conveyancing for you, explain the terms of your lease and deal with the seller’s solicitor on your behalf. The solicitor will also check contract documents and carry out legal searches. 

Exchange of contracts 

About eight weeks after reservation, subject to legal and mortgage arrangements being in place, contracts will be exchanged. The balance of the deposit is normally paid at this stage and the whole transaction becomes legally binding. Exchange and completion can be simultaneous or exchange with a fixed completion date up to 14 days. 

If the exchange does not take place on the agreed date, the property can be put back onto the open market. 

 

Completing the sale

Now comes the final step of the buying process… the legal completion. This is when your lender releases the funds to pay for your home, at your solicitor’s request. 

On the day of completion, one of our sales team will meet you at the property, take meter readings, then once completion of the sale has been confirmed the keys and handover pack will be given to you.  

And that’s it…congratulations! You are now the proud owner of your new home! 

If you have any further questions about shared ownership, please check out our FAQs in the contact us section of this website.