What Is Shared Ownership?
A government-backed scheme letting buyers purchase a share (10-75%) of a property and pay rent on the remaining share owned by a housing association.
Definition
Shared Ownership allows buyers to purchase between 10% and 75% of a property's value and pay subsidised rent on the remaining share, which is held by a housing association. Over time you can 'staircase' by buying additional shares. It is designed for people who cannot afford a full deposit or mortgage. You will need a mortgage for your share and you pay stamp duty, which can be deferred on the unpaid portion. Shared ownership properties are leasehold, so service charges and ground rent apply. Income limits typically apply (household income under £80,000 outside London, £90,000 in London). Properties are new builds or resales within the scheme.
Example
A 25% share of a £300,000 home costs £75,000. With a 10% deposit of £7,500 you take a £67,500 mortgage. You also pay monthly rent on the 75% share (£225,000) at around 2.75% = about £516/month.