Shared Ownership Homes: A Practical Guide to Buying Cheaply
If you’ve been hunting for a way to own a house without blowing your savings, shared ownership might be the answer. It’s a scheme that lets you buy a slice of a property—usually between 25% and 75%—while the housing association or a private developer keeps the rest. You pay mortgage on your share and rent on the rest, making the monthly cost far lower than a full‑mortgage payment.
How It Works in Simple Steps
First, you pick a property that’s part of a shared‑ownership scheme. Most lenders require a minimum deposit, but it’s calculated on the share you’re buying, not the full price. After the deposit, you get a mortgage for your portion and sign a tenancy agreement for the rest. Every year you can ‘staircase’—buy more shares—until you own 100% if you wish.
The rent you pay on the remaining share is usually lower than market rent because it’s set by the housing association. That rent can rise, but any increase is tied to official rent‑review rules, so it’s predictable.
Who Can Apply?
Shared ownership is aimed at first‑time buyers, those who have sold a previous home, or people who can’t afford a full mortgage. You’ll need a steady income, a good credit score, and you must meet the housing association’s criteria—often a maximum household income (around £80,000 in London, less elsewhere). The property must be your main home; it can’t be a holiday house.
Because you’re dealing with two contracts—mortgage and tenancy—getting professional advice helps. A mortgage broker familiar with shared ownership can find the right lender, and a solicitor will review the tenancy terms.
Here are three quick tips to make the most of a shared‑ownership purchase:
- Check the service charge. Some developments have high maintenance fees that can eat into your savings.
- Plan your staircase. Decide how fast you want to increase your share and budget for the extra mortgage payments.
- Know the resale rules. When you sell, the housing association usually has the first right to buy your share, which can simplify the process.
Shared ownership isn’t a one‑size‑fits‑all solution, but for many it’s a realistic route onto the property ladder. It lowers the entry cost, gives you the security of ownership, and lets you build equity over time. If you’re ready to explore options, start by browsing the listings on Pring Property Solutions—our platform flags which homes are available under shared ownership and shows the price breakdown for each share.
Remember, the key to success is to stay informed. Keep track of rent reviews, budget for staircase increments, and work with professionals who understand the nuances. With the right approach, a shared‑ownership home can be the stepping stone you need to own a house outright someday.