What is the Shared Ownership Scheme in the UK
This articles originally posted on 7 June 2024 and revised on 23rd May 2026.
Usually, buying a house requires a large deposit, anything from 10-20% of the house price. Then on top, there are other expenses like valuation, legal costs, transfer costs, and stamp duty* (read below for further explanation). Is there a way to own a house with a small budget?
In this post, I share my own experience of buying through shared ownership in London.
What is shared ownership?
I will describe how I understand it, and for more information, as well as houses available, follow this link. Shared ownership is a flexible approach to owning your first home. First, because it is only available if you do not own any other homes. Based on your salary and affordability, you can apply to purchase anything from 10%, 25% say 50%.
Who is the seller?
With shared ownership, you will be the owner of that percentage, and the rest is owned by the respective housing association. There are so many to name a few: One Housing (Riverside), Peabody, Notting Hill housing, and others.
What are the monthly payments?
The monthly payments consist of mortgage payments, rent on the remaining percentage, and service charges. In addition to owning a house, you would be paying for household expenses like water, gas, electricity, council tax, and broadband in full.
Shared ownership mortgage
Shared ownership mortgages work the same way as normal mortgages. Once you apply for the house and get accepted, you secure the mortgage. Here are some banks that offer shared ownership. I am not affiliated with those, but rather than copying their conditions, just check per the links below:
Halifax Bank shared ownershipNationwide shared ownershipHSBC shared ownershipBarclays shared ownership
My example
I have bought 25% of the flat at a price of £195,000, totalling £48,750.
The deposit I had to pay was 10% back then, £4,875.
I also had to pay for the valuation and solicitor, but in the end, it was not more than £6,000 in total for all, including the deposit.
What you need to know about shared ownership in the UK
As with any good scheme, there are some restrictions to be aware of.
- You will not be allowed to rent it without the permission of the housing association, the leaseholder, and a bank. You can live in the shared ownership home with your partner, husband, wife, or family without any issues.
- You cannot shortlet it all.
- You first have to sell to the housing association and then try the open market.
Tips for buying through a shared housing
- Check your local housing association, and even better, attend the Shared ownership expo like I did. You may also get a special offer, I recall having a cash back. Link here and video below. The expos are run not only in London but in other cities too – check the YouTube link.
- Get a mortgage in principle before you apply to speed up the process.
- Get a quote from a solicitor (not every solicitor works with shared ownership). A solicitor does not have to be in London or the place where you are buying. I have used Step Legal (not affiliated)
- Put some funds aside for a valuation of £225 ; the total for solicitors ranges between £1800 and £2000. There are costs related to the purchase; I would add an extra 1,000.
- You can pay by card for valuation, but not for legal and other costs, which are usually added together in the completion statement. The completion statement shows the total amounts to be paid by the buyer, including deposit, legal costs, and other buying costs explained above. If you are really short temporarily on cash, you can release it from a credit card. Just be mindful that this will impact your credit rating, and you need to pay it as soon as possible.
- Check building insurance and cladding!
- Ensure you make your calculations of monthly expenses, even based on estimates.
Stamp duty tax
If you are a first-time buyer, there is a relief on the stamp duty tax. Any property under 250k has no tax; after that, and until 650k, you need to pay 5%. So, if the property value is 275k, the 25,000*0.05% = £1,250 is due.
My conclusion
I totally support the shared ownership scheme as it really provides an opportunity to have your own home at a fraction of the price. I would definitely buy it again if I were asked. Since then, I have used the staircase to 100% – the process of buying more shares in your flat. Any market value increase in the property is my asset; my flat increased in value from 195k to 285k.
I hope this helped, and I will plan a separate post on the staircase to 100% to share my experience. This post is not written as financial advice, and you should consult with relevant mortgage and legal professionals when purchasing a home.
#SharedOwnership #FirsthomeintheUK
