What is Shared Ownership?

Shared Ownership is a Government scheme aimed at first-time buyers and non-homeowners who can't afford the full cost of a property.

How does it work?

Shared Ownership allows you to buy just a share of a property (between 25% and 75%) from a local housing association and pay an 'affordable' rent on the part you don't own.

Both new-build and resale homes are available under Shared Ownership, although they are all leasehold properties.

You can buy further shares in your home as and when you can afford to - a process known as staircasing.

The minimum share you can staircase by will vary according to the terms of the lease, but between 10% and 20% of the home's current value is typical.

The more you own of the property, the less rent you will pay to the housing association.

You'll need a deposit of at least 5% of whatever share of the property you are purchasing and a mortgage to fund the remainder of that share.

Lenders offering Shared Ownership mortgages include Santander, Halifax, Barclays, Nationwide and HSBC.

Am I eligible?

Shared Ownership schemes are open to first-time buyers, current non-homeowners (although you may have owned previously), or shared property owners looking to move.

Your household must earn no more than £80,000 a year, or £90,000 a year if you're buying in London.

What about selling?

If you still own only a share of your home, the housing association has the right to find a buyer for it.

If you have staircased and own 100% of the property, you will be able to sell it yourself. However, for 21 years from the date the home became 100% yours, the housing association may have the right to buy it back first, known as 'first refusal'.

What are the pros and cons?

Shared Ownership can sometimes be the only way of getting on the property ladder, or of buying a suitably-sized home you would not otherwise be able to afford.

And because you are only buying a share of a property, you'll also require a smaller mortgage which eases affordability issues.

However, as the home is not 100% yours, you won't be able to make any major changes or improvements unless otherwise stated in the lease and you have permission from the housing association.

You could also be restricted when you come to sell, while staying put and buying more shares will incur valuation costs each from the housing association.