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Shared Ownership: How it works

About Help to Buy: Shared Ownership

If you would like to buy your own home but can’t afford to purchase one on the open market, Shared Ownership may be the answer you are looking for.

Shared ownership is sometimes called ‘New Build Homebuy’ or ‘part rent/part buy’ and is a Government sponsored scheme designed to offer affordable housing to people who can’t afford to buy a suitable home in any other way.

Through Shared Ownership you can buy a share of the property, which is normally set at 50% and pay a subsidised rent on the remaining share.

This arrangement may include the option to buy further shares over time, and eventually own your home outright. This process is called ‘staircasing’.

Am I Eligible?

To qualify for Shared Ownership you must meet certain criteria;

  • Have a household income below £80,000 per annum
  • Be a first time buyer
  • If you used to own a home but can’t now afford to buy one outright or are an existing shared owner looking to move
  • You are able to raise a mortgage for the share you want to purchase, unless you have sufficient money to enable you to purchase the share outright

Indicative example of purchase

  • Mr and Mrs Smith would like to purchase a three bed home with an open market valuation of £200,000. They have a £10,000 deposit
  • They purchase a share at 50% = £100,000
  • They have a 10% deposit of £10,000
  • Therefore a mortgage of £90,000 is required
  • Ongoing monthly rent payments = £229.16 + any relevant service charges
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