With shared ownership you buy a share of the property, typically between 25% and 75%, with the option to buy more or all of the property at a later date.

You pay a mortgage on the share you own, and reduced rent on the portion you don’t own. The portion that you don't own is usually owned by a housing association, private developer or local authority. Rental payments are typically set at around 3% on the remaining equity.

If your financial situation improves, you can increase your share in the property by buying more of it in increments, until you own all of it or are ready to sell it.

To help more people buy a shared ownership property, the government recently reduced the deposit amount needed for the scheme from 25% to 10%.

Mark Baldwin Author

Shared ownership properties are always leasehold and so come with service charges.

Once you’ve decided on a property you put down a reservation fee, which is usually around £200. You’ll then undergo a financial assessment with the housing provider to work out what share of the property you can buy.

After that stage, it’s a fairly similar process to buying on the open market. You’ll need to secure a mortgage for your share of the property. Not all lenders offer mortgages on a shared ownership basis, so be sure to research your options.

Eligibility Criteria:
  • You are at least 18 years old.
  • You’re a first-time buyer or don’t currently own a property, though you may have owned one in the past.
  • You have a household income of less than £80,000 (£90,000 in London).
  • Buying a home on the open market is unaffordable for you.
  • You have a good financial history