1) A Shared Ownership deposit is more affordable
One of the main advantages of Shared Ownership is the reduced deposit requirement. Rather than saving 10% of the full property value, you only need to put down a deposit on the share you're purchasing. For example, if you're buying a 25% share of a £300,000 home, you would only need a deposit of £7,500 (10% of £75,000).
This makes Shared Ownership an accessible option for many first-time buyers who might struggle to save a large deposit, especially in London.
2) Know the eligibility criteria
To qualify for a Shared Ownership scheme, certain eligibility criteria must be met. Usually, you need to:
- Be at least 18 years old
- Have a household income of less than £80,000 (or £90,000 in London)
- Be a first-time buyer, or no longer able to afford to buy on the open market
- Not own another home at the time of purchase
- You must be able to show you are not in rent or mortgage arrears and demonstrate a good credit history.
Additional eligibility criteria may apply depending on the development you are looking to buy.
For example, some developments will only be available to buy by someone who lives or works in the same London borough as the development. This typically applies for a period from when the development first launches (i.e. first 3 months) before being open to applicants living anywhere.
3) Shared Ownership is leasehold
Shared Ownership homes are leasehold properties, meaning you don’t own the land outright. Instead, you lease your share of the home from a housing association, often for a term of 99 or more years.
When buying a new Peabody home the lease length can be between 125 and 999 years.
It’s important to check the length of the lease before buying, especially on resale homes, as shorter leases can affect your ability to get a mortgage or sell the property later on.
4) You’ll still need a mortgage for Shared Ownership
When buying through Shared Ownership, you’ll still need a mortgage for the share you’re buying. Mortgage lenders typically offer Shared Ownership products, but your options might be more limited than with a full ownership mortgage. We highly recommend you speak with a mortgage advisor to ensure you get a deal that works for your situation.
Also consider how much you can afford in monthly outgoings. Alongside mortgage payments, you’ll pay rent on the remaining share to the housing association and a Shared Ownership service charge for maintenance and management of the communal areas.
5) You won’t own the whole property
With Shared Ownership, you’re buying a portion of the home initially – usually between 25% and 75%. You’ll pay rent on the rest. This can be a great stepping stone, but it’s crucial to understand that you won’t have full ownership over the property, especially when it comes to making structural changes or renting it out.
You can often remortgage Shared Ownership properties to buy more shares or secure a better interest rate, but this can come with fees and eligibility checks.
6) You can own more of your home by Staircasing
Staircasing is the process of buying more shares in your home over time. You can eventually buy up to 100% of the property and stop paying rent altogether.
The more of the property you own, the less rent you pay — but your mortgage payments may go up. The price for any extra shares in your home is based on the market value of the property at the time you wish to buy more shares. The value will be set by an independent RICS-qualified valuer.
Keep in mind that you’ll have to pay valuation fees, legal fees, and stamp duty when staircasing.
7) Selling a Shared Ownership Property
If you decide to move, selling a Shared Ownership property works a bit differently. In most cases, the housing association has the right to find a buyer for your share within a set period (usually 8–12 weeks). If they’re unable to, you can then sell your share on the open market.
When selling your Peabody Shared Ownership home, Peabody will help market your home. If it has not been sold in 4 weeks, you are able to instruct an estate agent to market your property, paying their fee for the service they provide.
Frequently asked questions about Shared Ownership
In many cases, yes. This is called "staircasing to 100%", where you purchase the remaining shares until you own the property outright. However, some schemes (particularly for over 55s) may limit the maximum share to 75%, after which no rent is charged on the remaining portion.
This will depend on the housing provider. Shared Ownership leases are typically granted for 99 or 125 years. At Peabody, new build homes have leases between 125 and 999 years.
If your lease falls below 80 years, it may be harder to sell or remortgage, and lease extension costs can be significant. Always check the lease length before buying.
You are responsible for all repairs and maintenance of the home, just like a full homeowner. This includes both internal and external upkeep. However, if your home is a flat, the housing association is usually responsible for communal areas and structural issues, which are covered by your service charge. New build Shared Ownership homes from Peabody have a two-year warranty and are covered with either a NHBC or LABC 10-year new build warranty.
