Shared Ownership

What is a shared ownership mortgage?

A shared ownership mortgage is a special type of mortgage that provides a middle ground between buying and renting.

You buy a share of between 25-75% of a property from a housing association or housebuilder and pay a subsidised rent on the remaining share, as well as a monthly service charge. This allows you to take out a smaller mortgage, with a lower deposit and reduced mortgage repayments each month.

Taking out a shared ownership mortgage could help you either get on the property ladder if options on the open market are outside your budget or purchase a property in a more expensive location.

How does a shared ownership mortgage work?

Shared ownership mortgages work slightly differently from standard mortgages. There are several points to consider, including the following:

• The deposit is based on the share you’re buying, rather than the full market price of the property.
• You can typically use a process called ‘staircasing’ to gradually increase your level of ownership when your circumstances allow.
• You enter into an agreement with a landlord as well as a mortgage provider, which can mean restrictions on what you can do to the property.
• As the mortgage holder, you must live in the property and can’t rent it out fully or partially.
• When it comes to selling a property you partially own, the housing association will have the right to find its own buyer. If you have bought 100% of the property, the association typically has the first right of refusal for 21 years.

This type of mortgage isn’t for everyone, so it’s crucial you fully understand all the implications before going ahead. Our expert shared ownership mortgage brokers can explain all the details and help you find the best option for your unique situation.

Am I eligible for a shared ownership mortgage?

You might be eligible for a shared ownership mortgage if your household income is less than £80,000 per year (£90,000 per year if you live in London) and you can’t afford all the payments for a home that meets your needs.

Additionally, one of the following statements must be true:

• You’re a first-time buyer
• You’re a previous homeowner who can’t afford a mortgage now
• You’re an existing shared owner who wants to move
• You’re a homeowner who wants to move but can’t afford to buy a suitable new home
• You’re establishing a new household – for example, after splitting up with a partner

As with other mortgages, you’ll need to pass affordability and credit checks. Some housing associations might set additional criteria, such as that you live or work in the area where you want to buy a property.

Get in touch with our shared ownership mortgage advisors if you’d like help understanding if you’re eligible

How to get a shared ownership mortgage

Shared ownership mortgages are more complicated than standard mortgages. Many lenders that provide shared ownership mortgages prefer to work with trusted intermediaries, rather than dealing with applicants directly. It’s challenging to understand whether you’re eligible and calculate what you can afford. Furthermore, finding and comparing different mortgage deals is time-consuming, adding pressure to your already-busy schedule.

While you may be able to secure one on your own, it’s a smart move to work with our specialist brokers instead. We have access to all the lenders in this market and our advisors have a wealth of experience, which lets us provide you with expert guidance and remove the stress from the entire process.

How our shared ownership mortgage process works

1. Understanding your situation

First, you talk with our advisors about your circumstances, including your needs and budget. We help you understand if you’re eligible and consider all your options.

2. Gathering documentation

We let you know what information you need to support your shared ownership mortgage application and help you prepare all the paperwork.

3. Getting an agreement in principle

This is a quote for the amount you could borrow from a lender, which can streamline the house-viewing process by showing estate agents you’re a serious buyer.

4. Making your application

Once you’ve found a property you want to buy a share of, we use our network to find the best mortgage deals for you. After you choose your preferred deal, we manage the entire application process for you, so you can relax and focus on your daily life.

5. Receiving your offer

When the lender is happy with their checks, we help you complete all the final paperwork. All you have to think about is picking up the keys to your new home.