What is Shared Ownership?
Shared Ownership allows buyers to own a share in a new property and is designed to make homeownership more accessible.
Buying a share of a home means a smaller deposit is required compared to buying a new home outright. Read on to learn all you need to know about Shared Ownership.
Shared Ownership helps first-time buyers get onto the property ladder more affordably. You can usually buy an initial share of 25% to 75% of the value of a home, and you’ll need to take out a mortgage to pay for your share of the home’s purchase price.
You will then pay a subsidised rent on the share you don’t own, and there will also be a service charge to make up the monthly cost of buying through Shared Ownership.
By buying through Shared Ownership, you will need a smaller deposit than buying on the open market. It will also make you an owner-occupier in your home giving you the same responsibilities as a home owner.
✔ It’s a more affordable way to purchase a home without needing a huge deposit.
✔ You can own a high quality, new build home affordably without compromising on location or quality.
✔ You can buy as much of the property as you can afford, staircasing to buy more shares in the future.
✔ It’s a great way to get out of the renting cycle and become a home-owner.
✔ You will own the home and be able to decorate it however you like.
✔ You can sell your home at any time and will benefit from any increase in value.
✔ You must be aged 18 or older.
✔ Your annual household income if buying in London must be less than £90,000 (£80,000 outside of London).
✔ You will normally be a first-time buyer or be in the process of selling your home. You must not own any other property at the time you buy your new home.
✔ You should not be able to afford to buy a home on the open market.
✔ You must be able to show you are not in rent or mortgage arrears and demonstrate a good credit history.
*Eligibility may vary depending on property size and whether there are any criteria imposed by the local authority.
To buy through Shared Ownership with us, you first select a property and determine the share you can afford, typically between 25% and 75% of the home's value.
Next, you will need to arrange a Shared Ownership mortgage for your chosen share, preferably with the help of a mortgage adviser who can guide you through the process and assess your Shared Ownership Affordability. You'll need to act quickly, as you must exchange contracts within four weeks of being issued.
Once approved, you'll become a leaseholder of the property usually with a 250-year lease agreement. This long-term lease provides you with the right to occupy the home for an extended period, offering significant security. For the remaining share that you don't own, you'll pay rent to the housing association or landlord, usually set at a below-market rate.
As a Shared Owner, you will usually buy a percentage of the home (from 25%). Over time as your savings grow, you will be able to 'Staircase' which means to buy more shares and own a greater proportion of your home.
The greater the share you buy of your home, the less rent you pay to Peabody. If you Staircase to 100% you become an outright owner and pay no rent!
Most people will staircase 2 or 3 times before owning their home outright. It is important to consider the costs beforehand and whether Staircasing is right for you. Remember, Staircasing is completely optional and can be done at any time.
Download our guide to Shared Ownership
Shared Ownership is a great way to get onto the property ladder, but don't just take our word for it. We have helped thousands of first-time buyers find their dream home through Shared Ownership. Read some of their homeowner stories.
Homeowner Stories
Shared Ownership FAQs
Is selling a Shared Ownership property easy?
You can sell your home at any time. Under the terms of your lease, we have eight weeks to find a buyer for your home so your property can remain a Shared Ownership property. You can then decide to instruct an estate agent on the open market or continue to advertise it with us.
Our dedicated resale team offers advice and support throughout the process and you will be provided with a reselling pack once you complete an intention to sell form.
Can I own 100% of my Shared Ownership home?
Yes. You can gradually purchase more shares of your house through a process called ‘Staircasing’. You can go through the staircasing process up to three times. It is up to each leaseholder if you want to go through this process.
As you buy more shares in the property, you pay less rent. This is because the rent you pay is based on the number of shares Peabody New Homes have in the home.
Each time you staircase we carry out a property valuation. You buy shares at the current market value, rather than the price you bought the first share.
What are the benefits of Shared Ownership?
Shared Ownership requires a significantly lower deposit which makes it especially appealing to first-time buyers. Since you only purchase a portion of the property, typically 25-75%, the deposit is based on this smaller share, making it much more manageable than saving for a full property purchase. This lower entry barrier allows individuals to step onto the property ladder sooner.
The scheme also provides access to new build homes, which are often more energy-efficient and located in desirable areas, at a fraction of their full market price.
What are the disadvantages of Shared Ownership?
Although Shared Ownership is a stepping-stone towards owning your own property, you are still a tenant and therefore need to ensure rent payments happen on time or risk eviction or repossession.
Most Shared Owners are also not allowed to sub-let their properties unless they seek permission from their landlords or own 100% of the property. In addition, you may not qualify for first-time buyer stamp duty exemption.
Can you make a joint application for Shared Ownership?
Yes. It is possible to make a joint application for Shared Ownership. This option is available to couples, friends, or family members who wish to purchase a property together through the Shared Ownership scheme. Joint applicants must meet the eligibility criteria collectively, which typically include income requirements, first-time buyer status (or specific exceptions), and other factors set by the local authority.
When making a joint application, both applicants' incomes and savings are considered in determining affordability and eligibility. This can be advantageous as it may increase the overall budget and improve the chances of qualifying for a larger share or a more desirable property.
Do any buyers get priority over others?
Yes. Priority allocation in Shared Ownership schemes is commonplace and aims to address local housing needs and support community ties. The specific prioritisation criteria can vary depending on local authority, or development, but generally follow similar patterns.
Local residency is often a key factor, with priority given to those already living or working in the borough where the Shared Ownership home is situated. This policy helps maintain community cohesion and support those with established local connections.
Can I have pets in a Shared Ownership home?
Yes. Peabody understands how important it is for buyers to find the right home for their family including their favourite furry friends. We have a pet policy that allows for certain pets to live in a Shared Ownership home. Households have our permission to keep two dogs, two cats, and a reasonable number of small mammals and/or caged animals. You can read our complete pet policy here.
How can I get a Shared Ownership mortgage?
When buying a Shared Ownership home, you'll need to arrange a mortgage with the help of a mortgage adviser who will help you with the purchase process.
A mortgage adviser is able to look at the mortgage market and if needed, arrange a Shared Ownership mortgage for you. They will help you fill in the mortgage application form, submit the application and handle the processing of the application on your behalf – saving you valuable time and ensuring the right type of mortgage is obtained.
If you want to arrange your own mortgage, you should talk to banks and building societies and make sure that you advise them that you are buying a Shared Ownership property and the share you are buying.
Find your dream home
At Peabody New Homes, we have a number of homes available to buy with Shared Ownership throughout London. Use our property search to discover a home for you and to register your interest.