Shared ownership is a way to part-buy and part-rent a home. It's aimed at people who can't afford to buy on the open market.
How shared ownership schemes work
Shared ownership schemes allow people to part-buy and part-rent a home. Schemes are usually run by housing associations. There are some privately run schemes.
Shared ownership homes are leasehold properties. When you part-buy your home, you lease it from the scheme.
You buy a 25% to 75% share of a property and pay rent on the share owned by the scheme.
You pay a deposit of at least 5% of your share and get a mortgage to fund the rest.
Who can apply
Different shared ownership schemes have their own rules for who can apply.
You may qualify for a shared ownership scheme if you:
- earn under a certain amount
- don’t already own a home
- are a British or EU/EEA citizen or have indefinite leave to remain
Some schemes give priority to people in key jobs, such as firefighters, teachers, nurses, and people in the armed forces.
There is also a scheme for people with long-term disabilities.
Find out how to apply on GOV.UK.
Costs of shared ownership
- rent for the share owned by the scheme
- repayments towards any mortgage for the share you own
- leasehold service charges
- ground rent
- buildings insurance
How to buy more of your home
You can usually increase your share of the property to 100% over time by buying extra shares. This is known as staircasing.
You may not always be able to buy all of your home. This can include if your scheme is for people aged 55 or over.
When you buy more of your home, the cost of the extra shares is based on how much your home is worth at the time.
You pay valuation and legal fees each time you buy more shares.
Responsibility for repairs
You are responsible for paying for all repairs and home improvements in your shared ownership home - even though you may only own a share of your home
The scheme is usually responsible for the repair and maintenance of the building, but the costs can be passed on to you and other owners through leasehold service charges.
Check your lease if you are unsure who is responsible for maintaining the building.
You usually need your scheme's permission for major improvements, such as installing a new kitchen or knocking down a wall.
Eviction for arrears
You part-rent and part-own your shared ownership home.
If you don't pay your rent you can be evicted for rent arrears.
If you have a mortgage and don’t make payments, your mortgage provider can take action to evict you for mortgage arrears.
As a last resort, the scheme may buy back some or all of your shares in your home. This is called downward staircasing.
Help pay the rent and mortgage
To help pay the rent you can claim universal credit if you are on a low income or are out of work.
You should claim housing benefit if you are of pension age or getting a benefit with a severe disability premium.
To help pay mortgage repayments you can apply for a support for mortgage interest loan if you claim certain benefits.
You are not usually allowed to rent out your home. If you sublet without the scheme's written agreement you are at risk of losing your home.
Most schemes only allow you to rent out your home in exceptional circumstances. You must not rent it out until you get the scheme's permission in writing.
You usually need your mortgage provider's permission to rent out your home.
You are usually allowed to rent out a room to a lodger. Check if you need your scheme's permission.
Renting out a room in your home may affect your tax and benefits.
You must carry out a right to rent immigration check on any lodger who moves in.
How to sell your shared ownership home
You can sell your shared ownership property at any time but you will need the scheme's permission
The scheme has the right to find a buyer for your home or to buy it back itself.
You usually have the right to sell your home yourself if the scheme does not find a buyer (or buy it themselves) within a certain time.
Even if you own 100% of your home you usually need the scheme's permission to sell.
For some schemes, you may:
- have to pay back some or all of any discount you received if you sell within the first 5 to 10 years.
- only be allowed to sell to people living or working in the local area.
You also have to pay the costs of selling your home, including any valuation and legal fees.
Inheriting a shared ownership home
If the lease is in joint names, the lease will transfer to the other joint owner if you die.
If the lease is in your name only, you can leave it to someone in your will. However there may be problems if that person will not be living in the property.
Get advice from a solicitor if you are not sure who can inherit a shared ownership home.
Use the Law Society directory to find a solicitor in your area.
Still need help?
If you have payment problems
If you are at risk of eviction by the scheme or the mortgage lender
Last updated 06 February 2019 | © Shelter
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