Shared ownership schemes are designed to help those who cannot afford to buy a property outright. Aimed particularly but not exclusively at first-time buyers – eligibility criteria to buy also applies to household income – shared ownership means you will own a percentage of your home and pay rent on the remainder. For example, you can buy 25 to 75 percent of the property outright with the option to buy a bigger share at a later date or when you can afford it. Once you own 75 percent of the property, you don’t have to pay rent on the remaining 25 percent.
In England, shared ownership homes are sold on a leasehold-only basis. For more information about what a leasehold property is, check out Homeward Legal’s guide to freehold and leasehold.
Many shared ownership homes are newbuilds, but others are established properties being re-sold by housing associations.
Buying further shares in your shared ownership home is known as “staircasing”. You are under no obligation to purchase an increased share, but many buyers are keen to own as much of the property as possible until they own their home outright.
To staircase, you are likely to require an increase in your mortgage, known as an advance, or may want to move your mortgage to a different lender to take advantage of a better repayment rate.
As the legal status of the property changes each time you staircase, you will need a solicitor to negotiate the leasehold changes. Homeward Legal can introduce you to a solicitor experienced in staircasing to ensure this process is completed.
If you’re a first-time buyer, check out Homeward Legal’s comprehensive First-Time Buyers’ Hub where all your questions about purchasing for the very first time are covered in detail.