Help to Buy: Shared Ownership

What is Help to Buy?

It’s a home ownership scheme run by the Government to help eligible buyers purchase a home. Other types of Help to Buy schemes include London Help to Buy, Help to Buy: Equity Loan, and Help to Buy: ISA

What is shared ownership?

Shared ownership allows buyers to part-buy and part-rent property.

What is Help to Buy: Shared Ownership?

It’s a government scheme that allows potential homeowners who can’t afford the full mortgage on a home to buy between 25% and 75% of the property and pay rent on the rest. If you’re on a Shared Ownership scheme, it’s likely that you’ll eventually be allowed to purchase up to 100% of the property.

Who is eligible?

You may be allowed to take part in England if your total household earnings are £80,000 a year or less if you’re outside of London, or £90,000 a year or less if you’re in London.

You may qualify for Shared Ownership in England if:

  • Your household earns £80,000 a year or less (outside London) or £90,000 a year or less (in London)
  • you're a first-time buyer
  • you can’t afford a home now even though you used to own one, or
  • you already have shared ownership in a home, but are looking to move.

If you’ve got a long-term disability, you can apply for Shared Ownership via the Home Ownership for People with Long-Term Disabilities (HOLD) scheme. If there are no Shared Ownership properties that meet your needs, property on the open market may also be considered.

If you’re 55 or over, you can also apply for Shared Ownership through the Older People’s Shared Ownership (OPSO) scheme. This allows you to own up to 75% of a home. Once you’ve reached 75%, you won’t have to pay any rent on the remaining share of the property.

How does it work?

You apply for Shared Ownership through a Housing Association or Registered Provider. If you qualify, you’ll be offered an initial share of the property based on what you can afford. This is usually between 25% and 75% of the price of the property.

The Housing Association or Registered Provider still owns the remaining share of the property. You’ll have to pay a subsidised rent on this. This part-buy, part rent arrangement means that you’ll have to pay both a mortgage on part of the property as well as rent on the remaining share.

Can you buy or sell further shares of the property?

In time, it’s likely you’ll have the opportunity to purchase the remaining share of the property - you could eventually own it outright. Alternatively, you could sell the share that you own.

How is the purchase of shares funded?

If you’re purchasing part of a property through Shared Ownership, you’ll either have to apply for a mortgage or fund it through your savings. If you’re applying for a mortgage, you’ll have to pass your lender’s affordability checks, which assess whether you’ll be able to keep up with mortgage repayments.

If you’re applying for a mortgage, you may want to prepare in advance by checking your Equifax Credit Report & Score to view your credit history and get an indication of your creditworthiness – it’s free for the first 30 days, then £14.95 a month.

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