What is Shared Ownership?

Tue 22 Mar 2016

Buying your first home is a big step. And the cost of property these days can make it seem like an out of reach dream.

Shared ownership was introduced to help, and to keep the UK property market moving - first time buyers are essential to the whole economy!

The schemes which are offered by new build developers and housing associations, allow you to part-buy and part-rent a property. You buy a share of your home (typically between 25% and 75%) on which you’re required to take a shared ownership mortgage. You then pay rent on the remaining share you don’t own.

Not all lenders offer shared ownership mortgages, but the ones that do include Santander, Halifax, Woolwich and Nationwide.

You can generally buy a larger share of your home at a later date, a process known as staircasing, and continue to do so until you own 100% of the property.

If you decide to sell your home before you own 100% the developer or housing association has the right to ‘first refusal’ on buying your home before you sell it to anyone else.

Shared ownership can be a great way to get a foot on the property ladder, and may mean that you can afford a larger home that you originally anticipated. However, you do have to bear in mind that until you own 100% you may have to gain permission to make alterations and upgrades to your property.

As property prices continue to increase shared ownership is set to become increasingly common in the UK, and something that first time buyers should seriously consider to get them set up in their first home.