Shared Ownership is a government-backed scheme that helps people buy a share of a home while paying rent on the remainder. It’s designed to make home ownership more affordable.
Shared Ownership provides an opportunity to a wide range of people to own their own home, particularly those who would otherwise have struggled to build up the funds to purchase a house outright.
Shared Ownership was introduced by the Government in the 1980s. It’s had a few updates since then, with the latest changes being introduced as part of the Affordable Homes Programme (AHP) in 2021 to help more people take that first step onto the property ladder.
So, whether you have heard about Shared Ownership, or the entire concept is new to you, have a read through the information below and see how Shared Ownership might be your first step on the property ladder.
Shared Ownership: The basics
The government’s Shared Ownership scheme helps buyers purchase a share (usually between 10% and 75%) of either a new build or resale home and pay rent on the rest of the property. It’s a great way to get a start on buying your first home without having to purchase the whole house outright right away.
Shared Ownership allows you to purchase further shares of your home over time with a process called staircasing. So even if it may seem like owning your dream home is way in the future, Shared Ownership is a great way for many people to make the future happen now.
How does it work?
With Shared Ownership, you don’t need to have a massive house deposit ready to go. If you are eligible (check our FAQs), you only need a deposit to get a mortgage on the share of the house you are purchasing. The remainder of the house share continues to be owned by Raven Homes, and you will then pay rent on this share of the house.
You can increase your property ownership over time with staircasing, should you wish.
Key things to know are:
If you’re buying a home through the new Shared Ownership model, you can start with buying as little as 10% of a home. This means that your deposit will be 5-10% of the price of this share – so you don’t need to save a deposit for the full market value of the whole property.
Whatever size share you purchase, the remaining share of the home will be rented. This rent and mortgage payment is generally lower than the average rent on similar properties on the open market, making monthly costs more manageable.
As and when you’re financially ready, you can buy additional shares in your home, in most cases until you own 100% of the property. The bigger share you own, the less rent you pay.
Shared Ownership offers the benefits of homeownership while providing the security of a long-term tenancy. You may also have the flexibility to defer your Stamp Duty.