What is the Shared Ownership Scheme? 

What is the Shared Ownership Scheme? 

We don’t have to tell all of you first time buyers just how difficult it is to get onto the property ladder at the moment… Luckily, there are schemes that are there to help you get onto the property ladder, such as the Shared Ownership Scheme. 

The Shared Ownership Scheme is a great way for you to own a share in a property, if you can’t afford to borrow enough to purchase it outright on the market. 

So, what is the Shared Ownership Scheme?  

The Shared ownership schemes allow buyers who meet the eligibility criteria to secure a mortgage to buy a stake (usually between 25% and 75%) in a property, while paying rent on the remaining share to the housing association or private developer that own the building. 

Under the scheme, the cost of home ownership is made more affordable because you can start by buying as little as 25% share in a property and your deposit can be 5% of the price of that share, rather than the whole property. 

Can you eventually own the entire property? 

Of course, this is known as ‘staircasing. This means that you are buying more and more shares in the property, until you own 100%. Shares can be bought in 10% increments, which will in turn reduce your rent. 

Shared ownership schemes are provided by housing associations or private developers. The full details, and the exact costs and restrictions will vary by each provider, so it’s important to look into each one individually to understand everything involved. 

What are the downsides to the Shared Ownership Scheme? 

Unfortunately, it isn’t all smooth sailing, there are some downsides to this scheme you should be aware of: 

  1. Increasing the amount of shares you own can be expensive – it’s important to check the cost of buying more shares and if there are any restrictions with your provider. 
  1. If you’re looking to sell the property, then some other issues may arise. If you do not own 100% of your home, but you own a percentage of your home and want to sell, the housing association or local authority has the right to buy it through a process known as “first refusal”. They also have the right to find an eligible buyer for your home. After a period of time, if your housing provider fails to find a buyer, you are free to market your share of the property yourself or use an estate agent. 
  1. There are also likely to be restrictions on whether you can rent the property out. The majority of the time, you cannot rent out the property if you wanted to do so. 
  1. There may be restrictions on what you can do to the property, as you don’t own 100% of it, so you may need to check with the provider before proceeding with any work being done to the property, e.g. an extension or a new kitchen perhaps. 

Luckily for you, our team of fully qualified mortgage advisers are always on hand to give you the best advice throughout the whole process. 

We’ll be on hand to help you every step of the way in obtaining a new mortgage, and our service won’t cost you a penny when you go via our online portal. Visit our website today and obtain a quick quote with our online mortgage rate tool to see how much you could save on your next mortgage.  

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PLEASE NOTE: Article written 9th August 2022. Information contained within this article is likely to change and therefore should not be relied upon or form part of any form of decision making without seeking professional advice. * 


Any guidance and/or advice contained within this document is subject to the UK regulatory regime and is therefore restricted to consumers based in the UK. Any technical or regulatory information contained within this document was correct at the time of producing it but as it may be subject to change it should not be exclusively relied upon when making a financial decision. The Financial Conduct Authority does not regulate advice on Buy to Let mortgages.  

Article written: August 2022                                                                                                          050822 MZ000256

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