HomeBuy shared ownership
This content applies to England only.
Housing laws vary between England and Scotland. Get advice relating to Scotland
Shared ownership is a HomeBuy scheme that allows people to buy newly built homes on a shared ownership basis. In London, HomeBuy is known as First Steps.
Who is eligible?
This scheme is for people with a household income of less than £60,000 per year and who have enough savings to pay for the costs involved in buying a property.
You may be eligible if:
- you are a council or housing association tenant
- you are a first-time buyer.
What homes are included?
The scheme includes newly built flats and houses in certain developments across England.
How does it work?
This is a shared ownership scheme – you buy a share of the property from a housing association and the association keeps hold of the remaining share. You pay rent on this share, as you would to any other landlord. You have to buy a minimum share of 25 per cent of your home, but can buy anything up to a 75 per cent share in the property initially. You can also increase your share over time – ‘staircasing’ is allowed.
The landlord will charge you rent on the share you do not own of up to 3 per cent per year. For example, if the value of the landlord’s share of the property is £100,000, the charge for the year will be 3 per cent of this, or £3,000. You will have to pay the landlord £250 per month in rent.
As well as rent, you will have to pay the mortgage on your share of the property. It is important to be aware that people who buy leasehold properties have to pay service charges for repairs and improvements. You will also have to pay for all the other costs of owning a home.
What if I want to sell?
When you come to sell the property, your landlord has the chance to buy it back from you. The property will still be sold at the full market value, and you will benefit from any increase in value on your share. If the landlord decides not to buy the property, you will be free to sell it on the open market. The proceeds of the sale will be split between you and the landlord.
Want to know more?
For more information, see our page about home ownership schemes. To find out more about the schemes, properties available in your area or to apply, contact your local HomeBuy agent, or First Steps agent if you live in London.
Where can I get advice?
It is important to get independent financial advice before you decide to go ahead with any property purchase. An independent financial adviser will be able to help you choose the best scheme for you and work out what you can realistically afford. Independent financial advisers should be registered with the Financial Services Authority. They usually charge for their services. Alternatively, your local advice centre may be able to help you. Use our directory to find one.
