Shared Ownership

Shared ownership is a way of buying a home if you are a first-time buyer or if you cannot afford to buy a property at open market value.  It is a government backed initiative which helps buyers to buy a property over time. 

Buyers can buy an initial share of the property (usually between 10% and 75% of it) and then increase their ownership as and when they can afford to do so by a process called staircasing.   

The property could be a flat or a house.  In the case of a house, you will hold a lease over the property unless/until you purchase 100%.   In the case of a flat you will be a leaseholder to the Housing Association/Local Authority until you own 100%.  After that time, you will be a leaseholder to the Superior Landlord.

Buyers of shared ownership properties pay rent on the portion of the property owned by the housing association/local authority.

The benefits of buying a property this way are: –

• you have a chance to get onto the housing ladder,
• it provides an affordable and managed opportunity to you,
• a smaller deposit is needed,
• you can still get a mortgage,
• it’s your home – you can decorate it and make it yours!

However, there are important considerations when buying a shared ownership which are: –

• you need to be sure you can afford the mortgage repayments as well as the rent
• it’s a long-term commitment and over time, you will incur more legal fees as you buy a greater share of the property via staircasing.
• Staircasing could result in paying additional SDLT, which is a factor to consider if you are purchasing as a newbuild and intend to buy further shares it may be financial beneficial to you to pay SDLT on the full market value at the time of your initial purchase of the property.
• Any alterations carried out may require the consent of the Landlord.

Our residential property department has experience of assisting and supporting clients as they buy their first home.  For more information, please contact us at [email protected]