What is Shared Ownership?

Shared ownership is a more flexible and accessible way for prospective buyers to purchase a home. By buying a part of a property, you only pay a deposit on your share, making it easier to get on the property ladder without having to outlay a large cash deposit.

Shared ownership is rapidly growing in popularity throughout England, as over 200,000 households have now been helped onto the housing ladder by the programme. This rising demand is especially true in areas in and around London, where higher house prices make buying smaller shares particularly attractive. With the capital boasting 27% of shared ownership homes completed in the last five years, many Londoners see it as the best option to enter the housing market.

How large are the shares?

Shares are typically between 25% and 75% of the total property value. From 2022, the minimum share size will be reduced to 10%, opening the scheme up to even more who want to own a share of their home but might not otherwise be able to.

The size of your deposit and mortgage depends on the size of your share. This means you can invest in your own home even if the size of mortgage you’re able to access is less than the total value of the property.

What about the shares I don’t own?

Once you have acquired your share in the property, you pay rent on the remaining percentage retained by the housing provider – an organisation like us here at HSPG. For example, if you have acquired a 40% share in a property valued at £150,000, your share is worth £60,000. If you pay rent at 2.75% on the remaining £90,000 share, this amounts to £2475 per year, or £206 per month.

Can I increase my share?

Absolutely. If you would like to buy a larger share of your home – or even the whole property – you can do so at any time. This is called “staircasing”. The number of times you can do this and the size of the additional shares depends on the housing provider.

How do I get started?

If you’re interested in getting on the housing ladder, shared ownership is an excellent low-cost starting point. The fact that you can increase your shares at any time provides a manageable and simple path to full homeownership, without having to worry about sizeable mortgages and deposits.

HSPG is committed to helping more people access Affordable Housing. If you want to find out whether you are eligible for shared ownership and how HSPG can help you to get started on your journey, feel free to contact us.