With the cost-of-living crisis affecting many cash-strapped Londoners, it’s no surprise that many are looking at more affordable routes to home ownership. Of them all, Shared Ownership is perhaps the most popular option for people that need a helping hand on the property ladder.

But is Shared Ownership the best idea for you? Check out our guide below to help make the best decision for your home buying journey.

What is Shared Ownership?

Shared Ownership is a home ownership scheme that allows you to buy a smaller share of your home and pay rent on the remainder. Speeding up the home-buying process by reducing the deposit you need to pay, it’s a great option for first-time buyers looking for a quick and affordable route to the property ladder.

Benefits of Shared Ownership:

1. Affordable route to the property ladder

The biggest advantage of Shared Ownership is that it makes home ownership a possibility for people priced out by the housing market. Saving a deposit is one of the biggest hurdles that first-time buyers face to get on the property ladder, and this has only become a more acute problem with the cost-of-living crisis.

Buying a home on the open market would require a Herculean effort of sacrifice and self-discipline. Shared Ownership however, saves you the hassle of saving a big deposit - instead, you get the option to pay for a smaller share of your home, while paying subsidised rent on the shares that you don’t own. If you want to enjoy home ownership without having to spend ages saving a deposit, there is simply no better way to go about it.

2. It’s only the start

You might be buying through Shared Ownership, but don't feel like you need to own a small share forever. With Shared Ownership, should your financial circumstances change, you can buy more shares in your property through ‘staircasing’. Staircasing will help you buy more equity in your home, and also reduces the amount of monthly rent you pay. Unlike renting, where your cash goes straight into your landlord’s pocket, Shared Ownership is an investment in future home ownership.

Living room in the 1 bed Shared Ownership apartment at Limebrook Walk, Essex

3. More freedom to modify your home

When you rent an apartment, it’s up to your landlord to decide on any redecorations for home improvements. However, Shared Ownership enables you to decorate your home as you please. While there are restrictions on more major or structural changes, you can feel free to let your inner designer run wild.

4. Get a brand new property

If you’ve always envisioned your home being a lush, brand-new apartment, Shared Ownership is the most affordable way to do it. Many Shared Ownership homes are new build properties that come with brand-new appliances, fixtures and materials. As well as being stunning to look at, you also won’t have to worry about calling the repairman anytime soon. This means that you can enjoy the advantages of a brand-new property, without paying through the nose to do it.

5. Avoid a property chain

Buying a home in a property chain can often lead to frustrations and delays along the road. In most cases, the person you are buying your home from needs to have their next home all wrapped up and ready to move into. If they don’t, you’ll have to bide your time until you get the deed to your new home.

However, this isn’t the case with Shared Ownership. Provided you pass the eligibility checks, and prove your ability to afford your home, you can send off an application and find your dream home before you know it!

Bedroom in 2 bed Shared Ownership apartment at Valley House, Greenwich

Drawbacks of Shared Ownership

1. Maintenance and repair costs

Shared Ownership might be a more affordable route to the housing ladder, but it also comes with added costs that you won’t get as a renter. Depending on your housing provider, you might be expected to pay ground rent and service charge on your property - no matter what share you own. So, if your home-buying budget hasn’t taken account of these added costs, it’s probably not the best idea to buy through Shared Ownership.

2. Selling your share can be complicated

While selling a regular home on the open market is quite straightforward, selling a Shared Ownership home may take slightly longer. This is because you need to find a buyer that passes all of the specific requirements for Shared Ownership. So if you have difficulty finding a potential buyer, you could face delays on the way to your next home. However, if you have purchased 100% of your home, you’ll have no issue selling your home on the open market.

Our guide on selling your Shared Ownership home

Staircasing can sometimes cost more

Staircasing is a tempting option for people looking for full home ownership. However, buying more shares in your property can cost more in certain cases - as well as the cost of the share, you also need to pay for things like legal and valuation costs. However, the advantage of staircasing is that you pay a reduced amount of rent every month - so it all balances out in the end.