How does shared ownership work, and is it right for me?

What shared ownership means

Shared ownership is a government-backed scheme that helps people buy a share in a home - typically between 10% and 75% - while paying subsidised rent on the remaining share, which is owned by a housing association or registered provider.

• You buy a share: For example, you might purchase 25% of a home worth £200,000, which means paying £50,000 (often with a mortgage) and rent on the remaining 75%.
• You pay reduced rent: The rent on the part you don't own is lower than market rent, making it more affordable month-to-month.
• You can buy more later: Known as “staircasing”, this lets you increase your share over time, potentially up to 100%, at which point you own the property outright.
• You sell your share: When you move, you sell your owned share, often through the housing association or on the open market.

Who can apply for shared ownership?

Eligibility rules can vary slightly between housing associations, but generally you must:

• Be aged 18 or over.
• Have a household income of under £80,000 (or £90,000 in London).
• Be a first-time buyer, or someone who used to own but can't afford to buy again.
• Be unable to buy a suitable home outright on the open market.
• Have a good credit record and be able to meet mortgage and rent payments.

Shared ownership is especially popular with first-time buyers, key workers, and people looking to downsize but stay on the property ladder.

How the buying process works

1. Find a shared ownership property: These are usually advertised through housing associations, Help to Buy agents, or estate agents like Farrell Heyworth.
2. Apply and get approved: You'll need to provide financial details and evidence of income and savings.
3. Secure a mortgage: Not all lenders offer shared ownership mortgages, so choose one familiar with the scheme.
4. Pay your deposit: This is based on the share you're buying (e.g., 5–10% of your share, not the full value).
5. Complete and move in: Once contracts are signed, you'll pay your mortgage, rent and service charge each month.

Example: a typical shared ownership purchase

Imagine a property priced at £200,000. You buy a 25% share (£50,000), pay a 10% deposit (£5,000) and take out a mortgage for the rest of your share (£45,000). You then pay rent on the remaining 75% (perhaps £300–£400 per month, depending on the housing provider). You'll also pay service charges for building maintenance and communal areas.

Advantages of shared ownership

• Lower deposit: You only need to save a deposit on your share, making it easier to buy sooner.
• Affordable monthly costs: Combined rent and mortgage payments are often cheaper than private renting.
• Option to own more: You can buy additional shares over time if your income increases.
• Security and stability: You're a homeowner, so you have more control than renting privately.

Potential drawbacks to consider

• Limited choice: Shared ownership homes are mostly new-build or within specific developments.
• Service charges: These can add to your monthly costs, especially in apartment buildings.
• Restrictions on alterations: You may need permission for major changes or subletting.
• Resale process: Selling your share can take longer; housing associations usually have the first right to find a buyer.
• Costs of staircasing: Each time you buy an additional share, you'll need a new valuation and legal fees.

When shared ownership might suit you

• You're a first-time buyer struggling to afford a full-price home.
• You want to live in an area where full ownership is currently out of reach.
• You have a reliable income but only a modest deposit.
• You're looking for stability and want to stop renting privately.

When it might not be the right option

• If you can afford to buy outright, shared ownership may be less flexible.
• If you plan to move within a few years, fees and restrictions could outweigh the benefits.
• If you want full control over renovations or renting out the property, shared ownership can feel restrictive.

Shared ownership in the North West

Shared ownership homes are becoming increasingly popular. They allow local buyers to stay in the communities they know and love while making the jump from renting to ownership. At Farrell Heyworth, we can help connect buyers with available shared ownership homes, explain eligibility and guide them through each step.

How Farrell Heyworth can help

Our team supports first-time buyers through every stage of the process. We can:

• Identify shared ownership opportunities in your preferred area.
• Connect you with experienced mortgage brokers for shared ownership loans.
• Help you understand costs, staircasing potential and resale options.
• Provide honest advice on whether shared ownership fits your long-term goals.

Shared ownership can be an excellent way to take your first step onto the property ladder - offering flexibility, affordability and the chance to own more over time. But it's not for everyone. Before you commit, weigh up your finances, future plans and how much control you want over your home. With the right advice and support, you can make an informed decision that suits both your lifestyle and your long-term financial goals.