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What is Shared Ownership?

If you can’t afford the mortgage to buy a house outright then it might be worth considering shared ownership. Shared ownership is a way of owning part of the property while renting the rest through housing associations. Government backed and private schemes are both available.

With shared ownership you take a mortgage for a percentage of the property, between 25% and 75%. The remainder of the property is owned by the housing association, and you pay a rent on that share - this rent can be up to 3% of the market value of the share owned by the housing association. 

Shared ownership properties will be leasehold properties, which means that you own the lease on the property. This is for a fixed period of time, usually 99 years. Shared ownership properties also incur a service charge towards the maintenance of the property - this is generally payable monthly.

Shared Ownership Mortgage Help from Airline Mortgage Shop

Not all mortgage providers will offer mortgages for shared ownership properties. Nationwide, Santander and Halifax are among those that do. Consider how much you need to borrow, as 100% mortgages are less widely available than they used to be and there may also be restrictions on borrowing for a new build property - Santander will lend a maximum of 90% on a new build house and 80% on a new build flat. As a general rule, the more money you have as a deposit, the better your mortgage options will be.

Airline Mortgage Shop can quickly assess your situation and find the mortgage lender which is most suitable for your shared ownership purchase. Saving you the hassle of approaching many different lenders, some of which may not be suitable for your circumstances.

Shared Ownership FAQs

What shared ownership schemes are available?

There are a range of government schemes under the umbrella title HomeBuy. The best-known is New Build HomeBuy. There are also schemes specifically for social tenants and those who want to first save for a deposit.

Some properties are only available to key workers, such as nurses and teachers, and there are certain criteria you must meet on income, residency and other measures.

Can I buy extra shares in my home later?

Yes. Shared ownership schemes offer you the option of increasing your percentage stake in the equity of your home as and when you can afford to. This is called staircasing. The cost of increasing your share will depend on the value of the property at the time.

To do this you will need to pay for the housing association to carry out a valuation of the property and arrange a mortgage to buy the extra share.

What happens if I want to sell the property?

You can sell your shared ownership property at any time but the housing association has the right to find a buyer for your home, if it still owns a share of it and to buy it back first.

If you bought your home through Social HomeBuy and sell it within five years, you?ll have to pay back all or some of the discount.