Shared Ownership

What is shared ownership and how does it work?

Shared ownership is designed to make homeownership more accessible, particularly for first-time buyers or those who can’t afford to buy a property outright. With shared ownership, you own part of the equity in the property while the remaining share is retained by a housing association or developer.

As your financial circumstances improve, you have the option to gradually increase your ownership stake, potentially reaching full ownership over time.

Shared ownership can be an excellent stepping stone to full homeownership, offering lower upfront costs and monthly payments compared to traditional property purchases, while still giving you the stability and benefits of having a home of your own.

How is shared ownership different from renting?

Shared ownership allows you to buy a share of a property and pay reduced rent on the remaining portion, giving you both a home and an investment. Unlike renting, where you pay a landlord without gaining any equity, shared ownership helps you get on the property ladder with a small deposit and the option to increase you share over time. It offers more long-term stability and financial benefit than renting alone.

What are the advantages of shared ownership?

Share ownership offers a practical and flexible alternative to buying a home outright, particularly for those who may struggle with high deposits or mortgage affordability. It combines the benefits of homeownership with reduced financial barriers, making it an appealing choice for many buyers.

• Lower Deposit – You only need a deposit based on the share you’re buying, making it more accessible than purchasing a home outright.
• Smaller Mortgage – A lower purchase share means a smaller mortgage, reducing monthly repayments and overall borrowing.
• Greater Affordability – Ideal for first-time buyers or those on lower incomes, shared ownership offers a more affordable route onto the property ladder.
• Build Equity – As a part-owner, you benefit from an increase in the property’s value, relative to your share.
• Flexible Ownership – You can increase your share over time, with the option to eventually own the property outright.
• Long-Term Security – Unlike renting, shared ownership gives you the stability of owning your home, with the rights and responsibilities of a homeowner.

What are the disadvantages of shared ownership?

While shared ownership offers an affordable route into homeownership, it’s important to be aware of the potential drawbacks. These limitations may affect your financial planning, flexibility, and long-term goals.

• Limited Property Choice and Restrictions – These homes are often restricted to new-build developments and specific locations, which may limit your options. Alterations and improvements typically require approval from the housing provider.
• Full Responsibility for Costs – Even if you own a small share, you’re responsible for the service charges, ground rent and maintenance.
• ‘Staircasing’ Expenses – Increasing your ownership share of the property, known as ‘staircasing’, involves additional expenses such as valuations, legal fees, and possibly stamp duty, especially of property values have risen.
• Selling Challenges – If you don’t own the full property, you’ll usually need to sell to another eligible shared ownership buyer, which can take longer than a standard sale.
• Limited Mortgage Availability – Fewer lenders offer shared ownership mortgages, which may mean higher interest rates or stricter lending criteria.
• Leaseholder Risks – Despite being a part-owner, you’re still a leaseholder. Breaches of the lease, like missed rent payments, can result in legal action or even eviction.

How we can support you

Are you buying or selling a shared ownership property? At Taylor Bracewell, we’re here to make the process straightforward and stress-free.

Whether you’re:

• Purchasing a shared ownership home
• Selling your existing shared ownership property, or
• Increasing your equity share

Our experienced Conveyancers are here to guide you every step of the way. The legal process for shared ownership transactions is similar to that of a standard or new build purchase – and our team has extensive experience navigating these transactions efficiently and effectively.

We offer expert legal advice tailored to your situation, full support through purchase, sale, or equity increase, and clear guidance on the legal steps involved.

Download our conveyancing guides to learn more or speak directly with our friendly teams in Sheffield or Doncaster today.

• Sheffield Office: 0114 272 1884
• Doncaster Office: 01302 341 414

We can also help you with any of the following: