Shared Ownership Mortgages

A shared ownership mortgage also known as part buy/rent is a government scheme which is primarily focused on helping people to get onto the property ladder who may otherwise not be able to due to their income and savings in relation to property prices.

Do you qualify?


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Author: Carl Shave - CEO and co-founder
Last updated: 30 May 2024

What is a Shared Ownership mortgage

Shared Ownership mortgages are a government scheme which are primarily focused on helping people to get onto the property ladder. Between 25% and 75% of a property is usually bought from a housing association or house builder. This allows you to take out a smaller mortgage, with a lower deposit. And you will then pay rent on the remaining part.

A possible option for those people is a Shared Ownership scheme – whereby the `homeowner` part owns and part rents the property. This enables people to have lower mortgage repayments to make each month. Albeit there is still the monthly rent to take into consideration, and over time allows you the option to buy off the `rented` part of the property if desired.

An introduction to Shared Ownership Mortgages

Shared Ownership Topics

Shared Ownership makes homeownership a possibility for many; there are many different types.

Useful Information

What criteria do I need to meet in order to qualify?

There are several requirements which must be met. This includes a maximum household income of £80,000 per year or £90,000 if you live in London.

You will currently need to be one of the following:

  • A first time buyer.
  • A previous homeowner who cannot afford to buy now.
  • Renting from a housing association or the council, or have a long-term disability.

Finally, you will need to live in the property and you cannot rent it out fully or partially.

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How does Shared Ownership work

If you fit the criteria and are thinking about buying a Shared Ownership house, you’ll first need to check that the property you are looking to buy is included in the scheme. Speak to the house builder or federation to do so.
You will also need to speak to various lenders and ensure that they are willing to offer you a mortgage.
Using a mortgage adviser who understands the market can make the whole process much easier.

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Can I remortgage a Shared Ownership property?

Yes, you can get a Shared Ownership remortgage, as it’s like a conventional mortgage. As you were only being lent money against a percentage of the property rather than the whole property. It’s only the portion of the property’s value that you can claim that you will be remortgaging against.
The only difference when compared to a standard mortgage is that Shared Ownership Mortgages are only available via selected lenders.
Before remortgaging, you’ll also need to check with the housing association who you share the ownership with.
If you are not sure about how much you can borrow, why not try our free Shared Ownership calculator .


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How are Shared Ownership Mortgages different?

A main difference is that the deposit required is only for the part that is to be borrowed. So, for example, in a £200,000 property you are looking for a 50% stake, a 10% deposit required would be £10,000. A ‘regular’ 90% LTV mortgage to buy the property outright would be twice this amount at £20,000.

Another difference to a standard mortgage is a process known as `staircasing.` This allows you to buy more of your home from the housing association or house builder. You will obviously need to prove you can afford it, but this is a great way to take full ownership of your home.

There is also a difference when you come to sell. If you have purchased the entire 100% of the property, you can sell it yourself. However, the housing association usually has the right of refusal for the first 21 years after you have bought your property. If you do not have full ownership of your property, the housing association will have the right to find their own buyer initially.

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Who are the best Shared Ownership mortgage lenders?

As those that participate can vary it is difficult to provide an accurate list of such lenders. The pool of choice is limited with even some of the more recognised names not appearing. Although, some of the more common lenders used are:

What are Shared Ownership mortgage rates?

Shared Ownership mortgage rates are offered by a select number of lenders in the market. And they are usually specific products priced differently to their standard mortgage ranges.

The size of your deposit or the amount of equity you have in your Shared Ownership home (calculated as a percentage of the share you own) will determine the rate offered to you.

When deciding on the most appropriate rate available to you, do ensure you still factor in other associated monthly costs. This could be any applicable rent payable in addition to the mortgage payment itself.

Shared Ownership mortgage brokers

Not all lenders offer funding for Shared Ownership. Therefore, when looking for a mortgage to assist with the purchase of your share or a remortgage, you will have limited options. It is best to speak to a Shared Ownership Mortgage Specialist for help.

Our brokers can help you to get the right mortgage deal specifically for your unique situation. For more information about how our expert mortgage brokers can help you, get in touch with us today.

Shared Ownership FAQs

You may have to pay Stamp Duty if you purchase a property from an approved qualifying body.

The amount of Stamp Duty you owe is worked out each time you buy a share of the property.

When you buy Shared Ownership property, you can either make a one-off Stamp Duty or you can pay it in stages. The amount you pay is based on the market value of the property.

If you choose to pay in stages, you must pay anything due on the first purchase of a property share. But you don’t have to pay further Stamp Duty until you own more than 80% of the property.

For the most part it will be properties offered by local authorities and Housing Association. But it can also apply to properties owned by other bodies such as a housing action trust, a development corporation, the Northern Ireland Housing Executive, or the Commission for the New Towns.

It’s also good to know that Shared Ownership properties are always leasehold.

Under the Shared Ownership scheme, the minimum share you can purchase from an approved qualifying body is 25%.

Under the government’s Shared Ownership Scheme, the maximum share you can purchase from an approved qualifying body is 75%. If you want to own a share of more than 75%, you must buy the property outright.

There are no time restrictions imposed by the government under the Shared Ownership Scheme. However, individual housing associations or local authorities may impose time restrictions or other staircasing restrictions in their lease conditions.

The exact rent calculation will depend on the individual Housing association or local authority. Although, in many cases it’s based on a percentage of the retained equity, typically around 3%.

For example, if you bought a 50% share of a £200,000 property the retained equity would be £100,000, This is the share of the property on which you would pay rent. Assuming a typical rental calculation of 3%, the annual rent would be £3,000 which equals £250 per month.


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