What is Shared ownership?

Thomas Honour Mortgage Advisors

Table of Contents

If you can’t quite afford to buy in the traditional way then Shared Ownership, which is a part buy/ part rent scheme enables you to purchase a share of a property, usually ranging from 25% to 75% of the property value. It is offered by local authorities and housing associations.

How much deposit do I need?

You will be required to put in a minimum of a 5% deposit of your share, although there are some lenders that do not require a deposit.

For example, if you are buying a property for £300,000 and your purchase share is 50% (£150,000) the minimum 5% deposit required would be £7,500. You would need to obtain a shared ownership mortgage of £142,500.

Mortgage Advisors Brackley Northamptonshire

How much is the Shared Ownership Rent?

The unsold share is retained by the housing association or local authority, you then pay an affordable rent on the unsold share. The shared ownership rent on the unsold share is typically calculated using an interest rate of 2.75% under Homes England guidelines. The rent is reviewed annually by the housing association but tends not to increase higher than the rate of inflation. That said, it is important you check the terms and conditions prior to purchasing the property.

What share amount can I purchase?

The share amount you can purchase will vary depending on the property and your financial circumstances. The housing association or local authority will conduct an assessment to determine the share amount you are eligible for.

Can I purchase additional shares in the future?

The majority of modern shared ownership schemes provide the option to purchase further shares including total ownership of the property, this is known as ‘staircasing’. The price of buying a further share will be based on an independent valuation at the time of purchase.

Who is Shared Ownership suitable for?

Shared ownership is suitable for many people particularly those that have either a smaller deposit, lower household incomes or live in an expensive area such as the South East of England. The scheme is popular locally in Brackley, Bicester Banbury and Buckingham due to the disparity between house prices and average earnings.

In order to purchase using the shared ownership scheme you must meet the following eligibility criteria;

  • You must be at least 18 years old.
  • The required mortgage borrowing must not exceed 4.5 x your household income
  • Your total monthly payments to income ratio must not exceed 45%
  • Outside of London your annual household income must be less than £80,000.
  • In London, your annual household income must be less than £90,000.

There may be a requirement for you to have a connection to the local area of the subject property.

Where can I find Shared Ownership properties?

I would recommend that you start by checking out your local Help to Buy agent’s online portal, this is where the majority of shared ownership properties are advertised.

Brackley, Help to Buy Midlands & London:


Bicester, Banbury & Buckingham: Help to Buy (3) South: https://www.helptobuyagent3.org.uk/

You should also look at other online property portals such as Rightmove and Zoopla.

Thank you for reading my latest blog, if you have any questions or would like some professional, friendly mortgage advice then feel free to get in touch.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Thomas Honour

Thomas Honour

Business Owner & Principal Mortgage Advisor

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