How shared ownership works
You buy a share of a home, usually from a housing association, and pay rent on the rest. Your mortgage and deposit are based only on the share you buy, which makes it easier to get onto the ladder with a smaller deposit and income. Homes are almost always leasehold.
To qualify in England your household income must usually be £80,000 or less (£90,000 in London), and you can't own another home. Other UK nations run their own schemes. See government schemes.
Costs to budget for
- Rent increases: usually once a year, linked to inflation. Your mortgage payment doesn't fall when rent goes up.
- Service charge: you pay 100% of it, whatever share you own. Ask for the last three years' charges and any planned major works.
- Staircasing: each purchase needs a RICS valuation and legal work. Some newer leases allow buying 1% a year at a reduced cost.
- Selling: the housing association usually has first refusal to find a buyer for your share.
Assumptions
- A repayment mortgage at one rate for the whole term.
- Rent and service charge are shown at today's level and will usually rise each year.
- Stamp duty, legal fees and other purchase costs aren't included. Use the cost of buying calculator for those.