Shared Ownership
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Shared Ownership (Part 1)
Lilly Harrocks explains how shared ownership mortgages work. Episode one of two, recorded in May 2025.
What is shared ownership and how does it work?
Shared ownership is a scheme designed to help people buy a home when they can’t afford to buy one outright on the open market. You buy a share of a property, typically 25% to 75%, and you pay rent on the remaining share owned by the housing association or developer.
You only need a mortgage and deposit for the share you’re buying – so it’s a bit more accessible for those with a smaller deposit or a lower income.
Who is eligible for shared ownership? What are the criteria for a shared ownership mortgage?
You’re eligible for shared ownership as long as your gross household income is below £80,000 a year, or £90,000 if you’re in London. You need to be unable to purchase a suitable home on the open market, to not already own a home or to have sold it before you buy.
To get a shared ownership mortgage, you need to be over 18, have a deposit of at least 5% and have an income. It’s as simple as that.
Which lenders offer shared ownership mortgages? Are there many?
There are major UK lenders such as Halifax, Nationwide, Leeds Building Society, Barclays and Santander – all these offer shared ownership products as of now, in May 2025. The terms will vary lender to lender.
Which properties are available for shared ownership?
Shared ownership properties are usually new build or resale homes, specifically designated for shared ownership by housing associations or developers. Shared ownership is often found in private developments, where a number of affordable homes are required to gain planning permission.
A website that’s really handy to use is share2buy.com, which is essentially the Rightmove for shared ownership properties.
How much deposit do I need for a shared ownership mortgage?
You’ll need a minimum deposit of 5%, based on the share that you are buying, not the whole market value of the property.
Will my shared ownership property be freehold or leasehold?
Most shared ownership properties are leasehold, even houses. Ultimately that means you’ll pay a service charge to cover the upkeep of the grounds, communal areas and administration costs.
Can I buy a bigger share of my home at a later date?
Yes, you can. This is called staircasing. You can do it in increments of 5% and you can staircase right up until you own 100%. Each time you staircase, the cost is based on the current market value of the home.
You’ll also need to cover the cost of solicitors’ fees and shared ownership fees to do that. But you can absolutely buy more shares in your home.
Can I ever fully own a shared ownership home?
Yes – with staircasing you can eventually become a 100% owner. Most shared ownership schemes do allow for full ownership, but some may have restrictions.
Some specific areas have a maximum share that’s capped. It’s worth double checking that before getting into a shared ownership scheme, but the majority of the time you can staircase up to 100% ownership.
What happens if the value of my house changes?
If your shared ownership property value changes, so will the value of your share. It will also affect the cost of purchasing additional property shares – plus the rent on the part you don’t own. If the property value increases, you’ll likely see your rent increase.
What if I have bad credit? Can I still get a shared ownership mortgage?
If you need a mortgage to facilitate your purchase of the shared ownership property, bad credit could impact your ability to pass the lender’s credit score.
It really depends on the type of bad credit you’ve had, when it happened, how much it was for and the circumstances around it. Choosing the right lender will be a big factor, which is where our expert knowledge is crucial – we find a lender who will accept your circumstances.
All hope is not lost – it’s just a case of finding the best lender for you and getting a good idea of the credit situation.
Do you have anything to add before we return with part two?
I would just suggest always reading the lease terms carefully, especially around the restrictions and service charges, before entering a shared ownership scheme.
Use a solicitor who is experienced with shared ownership to avoid delays, and factor in future costs like rent increases, maintenance fees and valuation costs for staircasing.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
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Shared Ownership (Part 2)
We continue the conversation on shared ownership with Lilly Harrocks. Episode two of two, recorded in May 2025.
How do I sell my shared ownership home?
If you haven’t staircased to full ownership, you may need to sell your share on a shared ownership basis, which could affect the potential price you can achieve.You’ll need to pay for a valuation by a RICS chartered surveyor, and you might incur legal fees for both the housing association and yourself. You must inform your housing association as they have the right of first refusal, where they have a set period of time to find a buyer for your share.
If they can’t find a buyer within that time frame, you can advertise the property yourself or through an estate agent on the open market.
Can I make home improvements to my shared ownership property?
Yes, you can make improvements like redecorating or replacing a kitchen or bathroom. However, if you’re making any structural changes, you’re going to need written permission from the landlord.How does the remortgaging process work with shared ownership?
You can absolutely remortgage your shared ownership home. Your options may be limited compared to full ownership, because you’ll need your housing association’s permission – and the new lender must be approved by them.If you’re looking to ‘staircase’ up and buy a larger share at this point, you’ll need to to get a Royal Institution of Chartered Surveyors (RICS) valuation and your remortgage offer must cover the cost of the additional share. Legal fees and arrangement fees may apply, as well.
How does stamp duty work for shared ownership properties?
When buying a shared ownership property, you have a little bit more control over stamp duty. You can choose to pay the stamp duty based on the value of the share you’re buying, or based upon the full property value.If you choose to pay the stamp duty based upon the value of the share, you could incur further stamp duty if you choose to staircase and buy more shares at a later date.
But if you choose to pay the stamp duty based upon the full property value, you don’t need to pay stamp duty should you decide to staircase at a later date.
Are there any other fees to know about?
In addition to your mortgage and rent, you may have to pay ground rent and service charges for the maintenance of communal areas. You will also need buildings insurance, which is often arranged by the Housing Association.There will be legal and valuation fees when staircasing or selling the property. Be sure to read your lease agreement carefully to understand all ongoing and potential costs.
What are the alternatives to shared ownership mortgages?
There are a couple of other alternatives to shared ownership mortgages via other schemes. The First Home scheme is one of them, which offers discounted new build homes for First Time Buyers.Also, potentially a Joint Borrower Sole Proprietor scheme might suit you, where you can buy with family assistance to help affordability. It allows you to borrow more to achieve a property that suits your requirements [information correct at the time of recording in May 2025].
Always check at the time of looking which schemes are available.
What are the advantages and disadvantages of shared ownership?
The big advantage is that you need a lower deposit, because it’s based upon the percentage of the share that you’re buying. It’s lower than if you were to buy on the mainstream market.Shared ownership allows you to get on the property ladder sooner, and you also have that great opportunity to staircase to full ownership at a later date.
The disadvantages are that you still have to pay rent and possibly service charges. There is also a little bit less flexibility around making improvements and selling the property, and it can be harder to remortgage and sell than with full ownership of the property.
How do I apply for shared ownership? What’s the process?
Initially, speak to us to check your eligibility and what you can afford. As part of this process, we’ll get you a Decision in Principle so you can feel confident in what’s possible for you.You can then register with estate agents and housing associations so that you’re first to know about any new properties coming to the market. You’ll begin viewing properties, and once you find the right home, you apply. You’ll need to complete affordability checks and get approved by the housing association, which we will support you with.
Once you’ve been approved, you instruct a solicitor and fully submit your mortgage application. The lender will need to underwrite your full application before they issue a formal offer – they will carry out a valuation themselves and require documents to back up the application details.
The solicitors will carry out the legal work in the background, and once all has been completed, you can exchange contracts and set a completion date.
If the property is not yet built, you might exchange before a completion date can be confirmed – you’ll just need to wait until the property is completed. Housing associations sometimes request the exchange within 28 days of being accepted for the scheme, which is where having a mortgage broker on your side can assist your application.
You’ve demonstrated there how a mortgage broker can help. Have you got anything else to add?
A mortgage broker can help you by finding the lenders who support shared ownership, comparing the rates and terms tailored to your situation, and clearly explaining the costs, your eligibility and the process. We also support you with paperwork and negotiations.The process of buying a shared ownership property is more complex, so working with a mortgage broker who has experience with shared ownership is invaluable.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
For specialist tax advice, please refer to an accountant or tax specialist.
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Let your personal mortgage adviser save you time and money by researching the market (including your current lender) to find the best product for you.
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Once you are happy with the advice, your mortgage adviser will apply online for the best mortgage product for you.
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Your dedicated relationship manager will correspond with the lender until your new mortgage product begins. We will also remind you when the new deal is ending, ensuring you always have the best deal for your circumstance!
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What you need to know…
There are many reasons to consider your remortgage options however, the main reason is that you could be spending £1,000’s extra each year in additional interest. Other reasons could be that you would like to raise capital to build an extension, for home improvements or to consolidate some debt. It is best to chat over your existing mortgage and objectives with an expert independent mortgage broker to give you the advice you require to make an informed decision.
You can remortgage at any time, however you want to choose a time when there is a positive benefit to you moving mortgages. This may be when:
- You’ve come or coming to the end of your current mortgage product
- You want to raise monies, for example to complete home renovations
- You are on a variable rate and worried about rates rising
- Rates are lower than you are currently paying
You can get advice as to when is the best time for you to change your mortgage by chatting with an independent mortgage adviser.
Your monthly payments will vary depending to your chosen mortgage term, choice of mortgage product, how much deposit you have and repayment type. It is best to chat with a personal independent adviser to find out exactly what interest rate and term you can secure to give an accurate monthly payment.
Depending on the amount of equity in your property and the amount you can potentially borrow, some lenders will allow you to borrow up to 90% of your property value, subject to surveyor’s comments, and the purpose of what your intent to spend the money on. Lenders will typically allow you to raise monies for home improvements, buying another property and even to consolidate debt.
To find out how much you can borrow and how much this is likely to cost it is best to arrange a time to chat with an independent mortgage adviser.
The actual amount you can borrow will depend on your credit commitments, your regular monthly outgoings and how each lender assesses your income.
Lender’s affordability checks can differ meaning that the amount you can borrow may change from lender to lender. That’s where the expertise of our personal advisers comes in and where our independent status benefits you.
There aren’t necessarily any costs to you with remortgaging however costs typically include administration fees and lenders’ product arrangement fees. It is relatively common to save £200+ per month by remortgaging and if there are any costs involved with remortgaging, these are quickly recouped from the monthly savings – some lenders pay you to remortgage to them! There are 1000’s of deals available and our experienced independent mortgage advisers will calculate what it the best deal for you, focusing on saving you time, as well as money!
It’s often a requirement of your mortgage to have buildings insurance. This covers the bricks and mortar of the property.
It’s also a good idea to take advice from your personal adviser on protecting you and your loved ones if something bad happens. For example: Life Cover, Critical Illness Cover and Income Protection.
In most circumstances it will be worth remortgaging once you come to the end of your initial product period, as if you do nothing you will end up moving to the lenders standard variable rate. This will mean your monthly payments will increase and you will pay more then you potentially need back to the bank.
If you are thinking about remortgaging for a different reason, such as raising monies for home improvements, or are on the standard variable rate then please speak to one of our independent advisers to see how we can help you.
Remortgaging doesn’t have to be time consuming. By speaking to one of our independent mortgage advisers, we will save you time by searching 1000’s of deals, to find you the best deal that suits your objectives and circumstances. We will then process your application saving you time by chasing the lender on your behalf. Your dedicated relationship manager will also keep you informed throughout the full process of your application.
Because we are independent mortgage brokers we will be able to secure you the best deal for your circumstances.
Being accepted for a mortgage does depend on your circumstances. We are experts with all types of mortgages…. We specialise in obtaining mortgages for the self-employed, contractors, construction industry scheme (CIS) workers and those with historic adverse credit (as well as employed customers of course). In all these situations we can frequently secure high street deals. Being independent and experts is a real benefit in these circumstances.