Shared Ownership Purchase | First Time Buyers

Purchasing a Shared ownership property

PURCHASING A Shared OWNERSHIP Property

Purchasing a shared ownership property has become an increasingly popular choice for individuals looking to enter the property market, whilst managing financial constraints.

With the process involving the acquisition of a portion of a property’s ownership and the remaining share owned by a housing association or developer, there are a number of complexities around the purchase that it is important to be aware of.

An experienced legal team will help you to understand the intricacies surrounding a shared property purchase, examining the terms of a shared ownership lease, outlining aspects such as allocation of maintenance costs, the procedure for selling the property in future and the process of staircasing (gradually purchasing a larger share).

Shared Ownership FAQs – What You Need to Know

How do I apply for a Shared Ownership property?

You can register on platforms like Share to Buy and apply directly through the housing association listing the property.

What is a nomination period?

It’s a set period (usually 8 weeks) during which your housing provider has the exclusive right to find a buyer for your share before you can sell it on the open market.

How long does the buying process take?

It can take 8–12 weeks, but may vary depending on mortgage approvals, searches, and how quickly paperwork is completed.

Do I need a solicitor with Shared Ownership experience?

Yes, it’s strongly recommended. Shared Ownership leases can be complex, and a solicitor familiar with them can help avoid delays or issues.

What happens if my offer is accepted?

You’ll proceed to instruct a solicitor, apply for your mortgage, and begin the legal process of conveyancing.

shared ownership explained

by Isabela Faria

Wayne Hughes

Client Services & New Enquiries Manager

There are some general eligibility requirements that anyone wishing to buy a Shared Ownership home must meet. The general eligibility criteria for Shared Ownership are as follows:

You must be at least 18 years old.
Outside of London your annual household income must be less than £80,000.
In London, your annual household income must be less than £90,000.
Shared Ownership purchasers are often first-time buyers but if you do already own another home, you must be in the process of selling it.
You should not be able to afford to buy a home suitable for your housing needs on the open market.

You must show you are not in mortgage or rent arrears.
You must be able to demonstrate that you have a good credit history (no bad debts or County Court Judgements) and can afford the regular payments and costs involved in buying a home.

You will also need access to the deposit amount required. For Shared Ownership, this will usually be 5- 10% of the equity share you are buying but this will depend on the property and your affordability.

Please note: You should always check the eligibility required with the housing association selling the property, as they may have specific criteria.

The government previously announced their Affordable Homes Programme – a new investment which will see a £12 billion boost into the housing sector, providing up to 180,000 new homes across the country. A new model for the part-buy part-rent scheme will also be implemented on new build Shared Ownership properties delivered through the Affordable Homes Programme for five years from April 2021.

This new model means the following for buyers purchasing a home through Shared Ownership:

The minimum initial share buyers are able to purchase will be lowered to 10%, compared to the current 25%.
The introduction of a 10-year repairs and maintenance warranty.

The introduction of longer leases on new build homes.
Shared owners will be able to buy additional shares (also known as ‘staircasing’) in 1% increments, compared to the current 10%.
Shorter nomination periods for shared owners who are looking to sell their home.

If you are interested in a specific new build property or development, we would recommend discussing your options with the relevant housing provider as the new model is still in its early stages. You can also visit the government website to find out more about the new Shared Ownership model and register with Share to Buy to keep up to date with the latest announcements.

Where to Start

Registering with Share to Buy can help you find a Shared Ownership property.

Getting started with Shared Ownership is not as complicated as people might think and the first step would simply be to check if you’re eligible. Please note that in addition to the general eligibility rules, some housing associations and local boroughs may have their own terms regarding priorities and affordability. These should be outlined on each listing on the Share to Buy property portal, and the housing provider will be able to explain in more detail.

With Share to Buy you can search for suitable Shared Ownership properties, register your interest in properties and contact housing associations for viewings – Shared Ownership Properties, Mortgages & Scheme Info | Share to Buy.

When you have chosen a property, you will need to make sure you have the required deposit and are able to get a mortgage. To research the mortgages available across the market you can visit different lenders website to have an idea how much you may be able to borrow, and the Share to Buy Mortgage Comparison Tool gives you an insight into the Shared Ownership mortgages available on the market.

Shared Ownership Property costs

When buying a Shared Ownership home, you will need to put down a deposit. This is the amount you pay toward the cost of the share you are buying at the time of purchase. The amount required for a deposit will vary from property to property, but the typical Shared Ownership deposit is 5% or 10% of the share you are purchasing. For example, if you are buying a 25% share of a home with a full value of £300,000, the value of your share will be £75,000. If a 5% deposit was required, you would need to put down a deposit of £3,750.

You will require a solicitor or licensed conveyancer to carry out the necessary legal work. You will need to have instructed a solicitor before your mortgage application can be submitted, and it’s important to check with your solicitor that they are approved to work for your mortgage lender. For more information or if you’d like to get a quote, contact our team.

One of us will be happy to arrange a 30 minutes free of charge consultation. Our fees are usually based on a fixed cost basis.

As of the Chancellor’s latest announcement, first-time buyers in shared ownership homes will pay zero Stamp Duty on the first £300,000 of any home that costs up to £500,000. First-time buyers purchasing a shared ownership property will have the option of paying Stamp Duty on the full value of the property. The disadvantage here is the initial cost, with the advantage being that you will never have to pay Stamp Duty again – even if you go on to buy the property outright later at a higher price. Alternatively, you can choose to only pay any Stamp Duty on the share that you are purchasing, which may well be less than the allowance for first-time buyers. There may also be a Stamp Duty charge based on the rent payable over the term of the lease (lease premium), called the “net present value”. The advantage being to reduce the costs incurred at the time of purchase, the disadvantage being that the overall cost may be higher when you purchase 80% or more of the property. If you have already purchased your property and did not elect to pay the full Stamp Duty at the outset, then you will not be liable to pay more Stamp Duty until you purchase an 80% share of your home via the staircasing process. The calculation of the Stamp Duty payable can be complicated, and you should seek the advice of a solicitor or other legal adviser for the amount you may be liable to pay early in the process to find out what may be the best option in your circumstances.

Most mortgage brokers will charge a fee for their services, and these can vary from a fixed amount to a percentage of the purchase price. A mortgage broker should explain clearly what fees are charged and when before they undertake any work on your behalf.

Other costs may be incurred throughout the process such as removal costs, although these can vary greatly. Housing associations recommend that you have between £3,000 and £5,000 available to cover all the fees and costs of moving, which includes the solicitors and broker fees.