Shared Ownership Pros and Cons

Shared Ownership Overview

Shared Ownership is designed as a stepping stone to home ownership supporting first-time buyers get onto the property ladder. It has been a popular buying schemes aimed to support those who otherwise wouldn't have been able to buy on the open market and comes with a number of benefits.

Also referred to as part buy part rent, Shared Ownership allows you to 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.

You can check out our Shared Ownership eligibility guide to see if you are eligible. It's important to weigh up the pros and cons of buying through Shared Ownership which is why we have put together a helpful guide to support you.

Guide to Shared Ownership

Pros of Shared Ownership

Buying a home through Shared Ownership comes with a number of fantastic benefits including;

✔ The deposit required on a Shared Ownership home is usually a lot lower than buying on the open market as you only need a deposit on the share rather than full market value of the home.

✔ As you require a smaller deposit and the overall value of the percentage bought is lower, obtaining a mortgage is likely to be more accessible even with a lower wage.

✔ As you only buy a percentage in the home, you are usually exempt from paying stamp duty if the share purchased is below the stamp duty threshold which is a big cost saving.

✔ With Shared Ownership, your monthly outgoings can often work out cheaper than if you bought a property on the open market and also renting privately in some instances.

Guide to Shared Ownership

Benefits of Shared Ownership continued

✔ Buying through Shared Ownership will make you an 'owner-occupier' giving you much more stability and security for your living situation compared to renting.

✔ By buying only a share in the home, makes home-ownership more affordable and means you can often buy a home in central London locations without compromise.

✔ You can buy more shares in your Shared Ownership home in the future which is a process known as 'staircasing'. You can buy as much or as little as you want when you can afford to until eventually you own 100% of the home which will mean you own the home outright and pay no rent!

✔ As long as you keep up with rent and mortgage repayments on your home, you can live in the property for the duration of your lease usually 125 to 250 years.

✔ You have the option to sell your home at any time if you want to.

✔ You are free to have a pet in your Shared Ownership home as long as it meets the housing provider pet policy.

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Cons of Shared Ownership

✘ You can not sublet a Shared Ownership home.

✘ There are some mortgage lenders who don't offer Shared Ownership mortgages, meaning there are less available on the market, however it is still available by the majority of major lenders.

✘ You will need to pay a service charge on your Shared Ownership home to cover the cost of communal spaces like most leaseholds.

✘ Shared Ownership properties are sold as a leasehold which is a long tenancy ownership where you will given the right to occupy your home. The term of the lease will be fixed at the very beginning, decreasing in length each year, and the home can be bought or sold during that time.

✘ While you’re free to decorate internally, there are usually restrictions on what home improvements you can do. You will need to obtain permission from the relevant housing provider before you make any structural alterations to your home.

✘ When you come to sell your home, the buyer will also need to meet the eligibility criteria for Shared Ownership unless you have staircased to 100%.

Looking for Shared Ownership homes?

Discover a wide selection of studio, 1, 2 & 3-bedroom Shared Ownership homes available throughout central London and the Home Counties.

Find out what our homeowners say about Shared Ownership

Buying a first home, getting married and preparing for the arrival of a baby are all busy life events. Raph and Jaye would know, after experiencing all these milestones simultaneously. They purchased a 25% share of a two-bedroom apartment at The Switch in Wimbledon, with a £42,600 deposit.

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After spending years renting in London, wealth manager Aroma Khan purchased a 30% share of a three bedroom apartment in Queensbury, northwest London. She had no idea that, just two years later, she would be staircasing her way up to 100% ownership with a friend.

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Luca moved to London from Italy to work at a university. After a few years renting in London, Luca was able to purchase a 50% share of a bright two-bedroom, two-bathroom home through Shared Ownership at Arden, in Lewisham.

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Shared Ownership Overview

Pros of Shared Ownership

Benefits of Shared Ownership continued

Cons of Shared Ownership

Looking for Shared Ownership homes?

Find out what our homeowners say about Shared Ownership