What is Shared Ownership?
Shared ownership is a part buy, part rent scheme that is designed for those who can’t afford to buy a property outright. It allows you to buy between a 25% to 75% share of a property so you pay a mortgage for the share you own and a reduced rent to the housing association who own the remaining share. The government introduced a new Shared Ownership model back in September 2021 allowing buyers to purchase as low as a 10% share on a new build shared ownership property. All shared ownership homes are sold as leasehold properties as the freehold will be owned by the housing association.
To be eligible for shared ownership you must be at least 18 years old and have an annual household income under £80,000 when buying outside of London, and under £90,000 when buying in London. You cannot own a second home, whether this is in the UK or abroad, alongside a shared ownership property. You also must not have any bad credit issues such as missed payments, defaults or CCJ’s.
What are the benefits?
- Minimal deposit required – as a buyer only requires a loan for the share they are buying, the deposit requirements will be considerably lower than buying a property outright. A typical deposit requirement for shared ownership can be as low as 5% or 10% of the share you are purchasing.
- Lower monthly payments – you can only pass affordability for a shared ownership property if your monthly payments for mortgage, rent and service charge don’t exceed 45% of your household monthly income.
- Lower stamp duty payments – you are only obligated to pay stamp duty for the share you will own rather than the full market value.
- Opportunity to buy larger shares – this is a term called ‘staircasing’ where you can either purchase a larger share in the future or buy the remaining share to then own 100% of the property. If you staircase to 100% on a house, you will then own the freehold.
- No additional ground rent costs – ground rent is not payable as an additional fee on a shared ownership property until you own 100% of the property as these costs are already covered in your rent payments.
In the spotlight with
Amie Olive
Shared Ownership Manager
My name is Amie and I’m the Shared Ownership Manager at Sewell & Gardner. I have been working for Sewell & Gardner since 2019 and in 2020 we began selling shared ownership where I found a keen interest in the scheme. I have really enjoyed working closely with different housing associations, learning the shared ownership process and helping buyers get themselves on the property ladder. Shared ownership is such a popular scheme and works differently to a normal sale/purchase so I pride myself on offering our buyers and sellers a bespoke service that I believe is different to other agents locally.
Amie Olive Shared Ownership Manager
Having worked for Sewell & Gardner for 5 years I have been fortunate enough to work with a friendly and supportive team here who have taught me a range of skills. Having previously worked in our busy sales & new homes teams, I am now delighted to be managing our shared ownership offering. Shared ownership is such a popular scheme and works differently to a normal sale/purchase so I pride myself on offering our buyers and sellers a bespoke service that I believe is different to other agents locally. Having grown up in Croxley Green and later moved to Watford, I am very familiar with the local area which I find is a useful tool to have when discussing our properties with potential buyers.
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